Mike Pero probably not concerned with identity crisis, even though the mortgage business that still bears his name is now fighting with several former franchisees. Photo / Supplied
Mike Pero probably not concerned with identity crisis, even though the mortgage business that still bears his name is now fighting with several former franchisees. Photo / Supplied
Mike Pero’s name still synonymous with the enterprise he founded.
Call it a brand identity crisis.
Mike Pero probably wouldn't, even though the mortgage business that still bears his name is now fighting with several former franchisees.
"There's not too many brands that are in this situation, where the founder has sold the rights to the name," says the 55-year-old,who set up Mike Pero Mortgages in 1991.
"At times I get frustrated to think that someone has control almost of my identity," he said.
"The general public do get confused that Mike Pero is a brand and is owned by an Australian company."
That company is Liberty Financial, founded and managed by American-born businessman Sherman Ma.
It bought into Mike Pero Mortgages in 2006 and took full control of it in 2013 from the beleaguered NZF Group.
Pero, who grew the business from a minnow to a mammoth, hasn't held a financial stake in it for years. He sold half of it in 1996, bought it back in 2004 and sold it again the same year for $15 million.
However, he still had a place on Mike Pero Mortgages' board until June 2014 - two months before it launched legal action against him, the details of which are not public.
The Christchurch-based entrepreneur now focuses his attention on Mike Pero Real Estate, where he is chief executive.
That business, jointly-owned by Liberty's and Pero's interests, appeared on last year's Deloitte Fast50 list with revenue growth of almost 330 per cent.
That meant the real estate company, by Deloitte's reckoning, was the country's 23rd-fastest-growing business.
However, the ongoing legal issues between Liberty and Pero are unlikely to have made for the most cordial of boardrooms.
Pero, in any event, stepped down from the board last month to focus on running the business, with his interests now represented by a professional director.
"I liken it to maybe a truckie that's built up a fleet of trucks getting back out on the road. I absolutely love rolling my sleeves up and working with our business owners in real estate," Pero said.
Whatever his relationship with Liberty, the Australian group still ultimately owns the Mike Pero trademark.
"Some people say, 'What, they can't use your name, surely?' and I say, 'Yeah they can in the domain of mortgages, real estate and insurance'," he said.
As well as its dispute with its founder, Mike Pero Mortgages is also embroiled in a High Court wrangle with a group of its former heavy hitters.
In that action, seven former Mike Pero franchisees are contesting the parts of their contracts that prohibit them from competing with the mortgage business until 2017.
Mike Pero says he doesn't want people to think every decision made by Mike Pero mortgages is endorsed by him. He sold the business years ago and is no longer on its board. Photo / Simon Baker
They want a judge to declare that these restraint of trade terms are void and unenforceable.
Mike Pero Mortgages has since been to court itself and obtained orders that prevent the group from competing with it in the meantime.
One of the franchisees, award-winning Christchurch broker James Heath, unsuccessfully challenged the injunction last month.
Justice Simon Moore was unswayed by the fact it could mean the broker would have to sell his family home.
"Mr Heath must have known that Mike Pero [Mortgages] would respond in the way it has when confronted by the prospect of a former franchisee setting up business in direct competition contrary to its contractual obligations," Justice Moore said.
"I am satisfied Mr Heath has brought these consequences on himself through his own actions."
However, evidence Heath put before the judge gives a flavour of what could be argued at a full hearing over the restraint of trade.
Heath claimed the value of Mike Pero Mortgages' intellectual property and brand had deteriorated significantly.
He also alleged the business' customer management systems were unreliable and "embarrassingly unprofessional".
"Mr Heath's evidence is that in its 2013 review, the results of which were not shared with franchisees, Mike Pero learned it was no longer a competitive brand within the mortgage broking market," said Justice Moore when ruling that the injunction against Heath should continue.
Although Mike Pero Mortgages disputes Heath's claim, it can't comment on the legal proceedings.
