Nompumelelo Magwaza
A KwaZulu-Natal businessman who has lost a bid to renew his franchise agreement for one of his Woolworths stores in Ballito has accused the retailer of sabotage.
A judgment delivered in the Western Cape High Court on Thursday, ruled that Haresh Ouderajh did not have the right to renew the franchise agreement for his Ballito Lifestyle Centre Woolworths store.
The franchise agreement commenced on December 10, 2003 and would come to an end in December next year. He wanted a renewal for a further five years. Woolworths declined after he allegedly failed to meet his obligations.
Ouderajh has three Woolworths franchises on the KwaZulu-Natal north coast, two in Ballito – which are 1km apart at the Ballito Bay Mall and Ballito Lifestyle Centre. The third is in Stanger.
The court told Ouderajh to cease his operations in December next year after Woolworths alleged that he had breached several aspects of the Lifestyle franchise agreement. The breaches included failure to pay rent in time, making late payments of amounts due for stock, as well as failing to submit turnover certificates timeously.
Of the non-financial breaches, the retailer claims that Ouderajh failed to keep the Lifestyle Centre store adequately stocked, diverting business from Woolworths in the Lifestyle Centre to his store in Ballito Bay Mall.
Ouderajh said on Friday he was going to appeal the judgment. He also accused Woolworths of sabotaging his Ballito Bay Mall store by delaying stock deliveries. The delivery problems started when Ouderajh refused to sell all three of his franchises back to Woolworths. He asked for R50 million, however, the retailer was only willing to pay R40m, he said.
Ouderajh said that Woolworths being the sole supplier to all its franchises, it had intentionally short-delivered stock at his Ballito Bay Mall store.
“Some shelves in the store are empty and if I do get things delivered, it is either late or it is a wrong merchandise.”
He said he had incurred losses of about R4m to R5m of annual turnover due to delayed deliveries of merchandise.
“I have had to deal with irate customers because my store has been short delivered on items such as chicken, dog food, red vienna’s, cereals and some baby food.” He explained that he was 13 percent under stocked and that he was concerned that the retailer was trying to squeeze him out of business.
Responding to Ouderajh’s accusations Woolworths said delivery to the store in Ballito Bay had not been delayed. “All stock that was ordered, was delivered except in instances where product was not available,” the retailer said. Franchisees managed their own stock levels and were responsible for the ordering of stock.
However, according to e-mails between the franchisee Ouderajh and Woolworths in August, September and October, the store had complained about being short-delivered on basic items such bread, vegetables and other items. In some instances, stock was delivered on the expiry date.