Wrangle over Hell franchise hots up

A dispute between an Auckland advertising agency and Hell Pizza has splintered into a legal wrangle involving nearly $1 million and one frozen Hell store.

Hell Pizza franchisee Matthew Blomfield has served legal papers on the pizza company, claiming his $250,000 Glen Eden store had been refused a franchise because Hell had "got the pip" over demands for $544,000 in unpaid bills from his advertising company, Cinderella.

Hell general manager Colin Mellar said it had repaid $172,914 of the invoices and had no reason to pay the rest. "We have addressed every alleged disputed invoice. We believe we have paid everything we believe is payable."

But Mr Blomfield, co-owner of Cinderella, is now suing the company for more than $300,000 in an attempt to recoup his investment in a Glen Eden store he says he outfitted on an agreement he would get a Hell franchise for it.

Cinderella had walked away from the Hell advertising account when Hell decided to re-tender it, despite being invited to re-bid for the business.

Mr Blomfield said that since then the "tiff" over 48 unpaid invoices from Cinderella, dating from March, had tainted the relationship and that was why he was not awarded the Glen Eden franchise. "There is no other reason for this other than them being petty and spiteful," he said. "It is personal."

Correspondence between the parties had been encouraging toward the opening of a Hell outlet in the Glen Eden premises.

Mr Mellar said it was a franchising matter and he did not want to comment on the change of tack. "There has been no decision about the future of Glen Eden," he said.

Mr Mellar sent an e-mail last month saying Hell was "no longer comfortable" with Mr Blomfield's involvement in the franchise network, though he already owned five franchises, three of them in the top 10 performers.

The company had already refused an offer by Mr Blomfield to sell the five franchises back to Hell.

Mr Mellar said Mr Blomfield was in a "unique" position as an owner of Cinderella and a franchisee, but said neither situation had affected the relationship.

"From my perspective there is no change in my relationship with Matt Blomfield."

Mr Blomfield said that, having invested more than $1 million in a "flagship" store at Te Atatu, compared with about $250,000 to outfit an average Hell outlet, he had demonstrated his commitment to the brand. He had told the company of his goal to own 10 Hell franchises.

He said Mr Mellar had given no reason for not granting him the Glen Eden franchise. "I'm still going to make money out of Hell, it's just not what I thought."

- © Fairfax NZ News