Beware of con artists David Thexton & Amanda Morgan, directors @ Kiwi Beverages Sugar Free Limited! Formerly Kiwi Beverage Company Limited

It all started fantastically well in January 2019 when I replied to an advertisement in a New Zealand Franchise Magazine for a franchise distributing  a new range of sugar-free soft drink that was in direct competition with Coke & Frucor, offering a healthy alternative soft drink range.

With an initial start up cost of between $40 – $105k and a total of 10 franchisees who paid around 2 million to secure licensed territory rights, to be the sole sales agents in your region of choice. The other major cost was the purchase of a specific type of delivery van @$75k.

Launched in April 1st 2019 I believe with the best intentions, it turned sour pretty quickly with false accusations of bringing the brand into disrepute. We were literally told by David Thexton we were not working hard enough, or smart enough and not spending enough on advertising, while forced to break health & safety legislation by working late and driving sometimes up to 16 hours a day.

From early on there was minimal communication from David & Amanda basically left us to fend for ourselves in an industry we knew nothing about. We were informed all training for the position would be held quarterly (every 3 months) and follow up help would be available 24/7.

In the meantime, David and Amanda had a grandiose plan of purchasing a warehouse, bottling plant to formulate, manufacture and distribute the Kiwi Beverages product range from one hub. However, there was one ingredient missing. The 10 franchisees including myself had been eliminated from the equation one by one with contracts terminated.

Every one of us franchisees individually had been excluded, banned with contracts torn up by David & Amanda with a myriad of excuses ranging from bringing the Kiwi Beverages brand into disrepute, to not complying with the Kiwi Beverages franchise agreement. Other reasons like not enough sales, collusion with other franchisees (we all had the same issues), not meeting deadlines were thrown out there to dilute the fact that the Franchisors were not complying with their obligations of the contract.

Marketing/Promotion:

Other than a brochure with some flyers/stickers (POS material) there has been no other marketing/advertising done for the company or Franchisees.

No media, radio & television or digital advertising was done to promote the products, in which were competing in a serious market against giants Coca Cola & Frucor.

All the while prohibiting Franchisees from using any form of social media to get the brand recognised.

Stock:

We had limited stock prior to and after Launch date enabling us to distribute minimal products.

Products deleted before launch April 1st, 2019 but after contract was signed, Foxton Fizz (was supposed to be biggest seller). Otago Gold-Syrups of various types cancelled just before launchSome Products not ready on launch date April 1st 2019

When I signed the contract in January 2019, the agreement between both parties & other franchisees was the lease of a commercial van for the purpose of deliveries. Two weeks later without consultation we were told that we had to finance & purchase the vehicles outright, (March 2019) which had to be a specific brand for 75k. As David and Amanda went out and placed a 100k deposit on the vans to be imported from Australia, as there was none in NZ at the time. I was then pushed into the purchase.

The afterthought behind the van idea was that it was to be used as a mobile billboard for a company marketing exercise. This was the only company advertising ever displayed except for minor shop displays and the above mentioned.

Other Grievances:

Area extended to Warkworth with signed contract extension 23-02-2019

Area extension removed 09-03-2020 with written letter from David and Amanda

Company sales agent selling in this area from 09-03-2020

Total lack of due diligence before start up by David and Amanda

No key accounts secured which was one of the key drivers being told to us at the beginning

David informed us that he would train Clare to specialise in attaining key accounts for the first month before letting her complete this huge task on her own.

On one occasion David even said "I know a guy at Subway, I'll get us in there"

Spoke to David & Amanda months later for David to say they are having difficulty approaching anyone from Subway.

 We were told by David himself that we would be entered into Grocery (ie Pak N Save, New World, supermarkets) within the first 3 months of operation. We had no product codes for these stores until 32 codes were added in 22-08-2019. Well over 4 months later, then it was left to us to approach the buyers of each individual store to get our products on the shelves with no training.

 I was informed that our two-day training would cover the sales aspect of the Franchise, as I had none previous. David informed me that he had trained 300 sales into superstars. There was some brief information but most of the training involved the product, David's previous companies and the software. No quarterly follow up training given other than a one-day seminar in Wellington.

 Was given authority verbally with special deals to work with. Inform customers of the deals and specials only to find they are no longer available.

Having different discounts specials for company reps than franchisees. (ie: our deal for grocery with the new Rio product was 9+1, (order 9, get 1 free) and the sales reps 5+1). Trust was starting to be dissolved because of this.

Placed company reps into Grocery (selling into supermarkets) inhibiting our ability to sell, as a lot of my shop owners did big purchases from these stores at discounted prices.

Unable to get direct answers a lot of the time. Going through third party channels to get answers which are relayed and even delayed. We did have a team leader group which was dissolved by David, where we were able to communicate any relevant issues.

Killed the culture by stating we are not to talk to other Franchisees. (We all had the same issues)

Not answering phone calls or returning emails in a timely fashion.

David stated at the first meeting we attended, that the products would be on par or cost less than our competitors. However, all our range was at the higher end of the spectrum and we struggled to enter the market as the price point to customers was at best discouraging.

Never had the full range of products that was in the brochure until June 2019.

Change in range with Foxton Fizz being changed out after my contract signed. Replaced with Kiwi Fizzy which was our worst selling product.

Definitely realising this was David’s and Amanda’s plan all along. To use the franchisee's money as a start-up, build the warehouse and bottling plant, then tighten the noose with a whole new set of policies. So we struggle to make inroads and he can place a company rep in our area that we have built up over the prior months instead.

 Told all of us that he had the trademarks for the whole range. None for the Tiki Brand.

Commissions paid late on regular occasions.

Next to no marketing done for the Franchisee area except for the brochure, posters & stickers. The only shop I had signage made is still waiting for payment as of 25/01/2020. Now we are supposed to use 2% of gross earnings to use for any marketing material. Breach of contract.

The question was raised at training and David stated that soft advertising would roll out which was sort of done, then after a period of time hard advertising would be used (ie. TV, radio etc). None done.

 No mention of the minimum amount before we receive overnight deliveries. We were told deliveries would arrive overnight. With the new policies in place we had to have a minimum order before we put orders through, which we struggled to get delivered in time for the customer.

Told we were to no longer place fridges in stores from Dec 2019 which was a huge part of revenue lost.

Be Aware:

I am making people aware of these con artists David Thexton and Amanda Morgan who have no back bone, as they have formed another company called ConsultX.com. They will bullshit their way out of a paper bag, by trying to sell these Franchise consultancy packages with no substance or ethical business practice. Please use due diligence (do your homework) and make sure you cover every aspect of the business before you sign any contract or indeed part with any franchise fee.

You may well think I have a vendetta against David and Amanda and your probably correct in this assumption. However, 10 franchisees all disbanded within a year, 2 million dollars out of pocket with the franchise division of Kiwi Beverages Sugar Free Limited dissolved, it doesn’t take a rocket scientist to come to the conclusion that we were totally screwed by them.

With the warehouse, bottling plant along with distribution under the Kiwi Beverages Sugar Free Limited flag and still trading. My personal belief is that David and Amanda by terminating our contracts have abused their positions as Franchisors to unceremoniously remove us from any involvement in the future of Kiwi Beverages Sugar Free Limited going forward.

My accountant has uncovered nearly 200 companies most of which have been dissolved were formed by David Thexton and Amanda Morgan over their life time to date. The current ones we know that are still trading ConsultX.com and Kiwi Beverages.co.nz are the ones to beware of.