Owners of Wendy's Supa Sundaes stores say they are fighting for their livelihoods after being allegedly forced to buy Australian ice cream rather than Kiwi product by the brand's overseas owner.
Kiwi franchisees have rebranded to Shake Shed & Co in an attempt to break away from Singapore-based parent company Global Food Retail Group, which purchased the master franchisor rights for A$10 million ($11.2m) in 2014.
There are 32 Shake Shed & Co outlets located throughout New Zealand, formerly trading under the name of Wendy's Supa Sundaes, and two original stores.
Former New Zealand Wendy's master franchisee Chang Xi said the franchisee businesses operating in shopping malls had united and collectively abandoned their agreements following restrictive measures from the ice-cream brand's owner, which had harmed local operations.
The parent company has hit back with injunction proceedings and the matter is now going through the Tauranga High Court.
Xi said local owners fear their businesses will go under and jobs lost if they are forced to return to operate as Wendy's.
"We rebranded as a group as we feel that we need to be separated from this international franchisor to be able to survive," Xi said.
"We have encountered a very terrible situation.
"All New Zealand franchisees are extremely upset."
Xi said Supatreats NZ Limited, ultimately owned by Global Food Retail Group, had introduced restrictive measures for franchisees, including a set list of approved suppliers that operators must now buy product from.
Shortly after Global Food Retail Group took over, it had made Kiwi franchisees buy ice cream from an Australian supplier which costs 50 per cent more than the price of the local product it had been supplied by Emerald Foods for 30 years, and was "not as good quality", he said.
"We had no input into that ice cream; to trial it, to test it - nothing," Wendy's New Zealand training manager Elizabeth Myburgh told the Herald.
"We have fine dairy in New Zealand. For a customer now to suddenly have to accept an Australian ice cream when we've got what we've got in New Zealand, I think will negatively impact the business, as it is anyway."
Scoop ice cream was the first product to have its supplier changed, with proposals for new soft serve and hot dog suppliers following after, Xi said.
There were other issues with the franchisor, including changes to its marketing, he alleged.
Xi said he went through a process of meditation with Supatreats Australia prior to the franchisees decision to collectively rebrand.
"We didn't want to rebrand, we were forced to do it so that we can survive."
Emerald Foods, which had been supplying Wendy's Supa Sundaes with ice cream for 30 years, legally lost its contract to supply Wendy's franchisees with ice cream but is supplying businesses now trading as Shake Shed & Co, Xi said.
Emerald Foods general manager David Foreman said the Auckland-based ice-cream manufacturer was unable to comment on the matter.
The situation had been trying for franchisee owners and their families, who faced an uncertain future, Myburgh said.
We rebranded as a group as we feel that we need to be separated from this international franchisor to be able to survive.
"We get a lot of questions about why we are not Wendy's anymore, and we can't answer," she said.
"It's awful because this affects 34 people's livelihoods and their staff."
Global Food Retail Group, owned by parent company Global Yellow Pages, acquired the Australian Retail Franchise Group, the former master frachisor of Wendy's Supa Sundaes, in September 2014.
A spokesman for the owning company said both Supatreats Asia and Supatreats NZ had filed legal proceedings against Shake Shed & Co.
The spokesman said proceedings allege breaches of franchise agreements both by the master franchisee of Wendy's in New Zealand, sub-franchisees and breaches of confidence by Xi and a director of Shake Shed & Co.
An injunction application was heard in the Tauranga High Court on June 11.