Kiwibank sweetens franchisee offer

By Phil Boeyen, ShareChat Business News Editor

Monday 11th March 2002

The cost of setting up the Kiwibank system could rise by more than $2 million as New Zealand Post agrees to pay for fitting out franchises in existing businesses.

Under the original offer NZ Post shared the cost of fitting out branches with franchisees by providing capital through a five-year interest free loan of up to $12,500 a franchise.

Chief executive, Elmar Toime, says the revised offer would retain the logistical and financial benefits of a continuous rollout of branches and at the same time eliminate uncertainty for franchisees over the investment of capital.

"In an ideal world, New Zealand Post would have had more time to work through issues with individual franchisees. But it is no small task to establish a retail bank for all New Zealanders. The logistics and timelines are challenging.

"While we have received strong support for the Kiwibank concept from virtually all franchisees, we have also had feedback that some are uncertain over the risk associated with committing capital to the venture.

Mr Toime said the revised offer would cost up to $2.125 million and would be met from within the existing budget for Kiwibank without affecting the business case.

"The revised offer is a good solution for both New Zealand Post and the franchisees. It addresses New Zealand Post's desire to capture the benefits of a continuous rollout of Kiwibank branches while at the same time reducing risk and uncertainty for franchisees."

The revised offer was mailed to franchisees on Monday and is open for the next few weeks.

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