Plan Franchise Customer Complaints in New Zealand

Before you franchise an existing New Zealand business, test what happens when a customer is unhappy. A founder may currently resolve problems through personal judgement, goodwill or an informal refund. Franchisees need a repeatable process that protects customers without leaving them uncertain about authority, costs or responsibility. Getting this right helps build trust across your franchise community.

Separate customer rights from brand promises

New Zealand has no franchise-specific legislation or government franchise registration requirement. General laws still apply. For customer complaints, two important statutes are the Consumer Guarantees Act 1993 and the Fair Trading Act 1986.

The Consumer Guarantees Act provides guarantees for qualifying goods and services, with remedies depending on the circumstances. For example, goods must be of acceptable quality, and services must be carried out with reasonable care and skill. A business cannot simply replace these rights with its own restrictive returns policy. Contracting out is permitted only in limited business-to-business circumstances where statutory requirements are met.

The Fair Trading Act prohibits misleading or deceptive conduct and false or misleading representations. Statements about refunds, warranties and customer rights therefore need the same care as advertising claims.

Separate your complaint policy into three layers:

• Legal remedies: what the customer is entitled to under applicable law.
• Additional brand promises: any satisfaction guarantee or voluntary returns offer you choose to make.
• Discretionary goodwill: gestures that go beyond legal obligations and published promises.

Have a New Zealand lawyer check these distinctions. A discretionary spending limit must not become a ceiling on a customer's legal entitlement.

Decide who handles each complaint

Map the customer journey before allocating responsibility. Who takes the order, receives payment, supplies the product and performs the service? Those roles may differ when a central website accepts orders that local franchisees fulfil.

Document who should receive the complaint and who must investigate it. Internal allocations between franchisor and franchisee should not misrepresent or restrict the customer's rights against the legally responsible business.

Create a simple responsibility table covering:

• Purchases made directly from a franchisee.
• Online orders fulfilled by a local outlet.
• Complaints submitted to head office or through social media.
• Requests made at a different outlet from the original purchase.
• Problems involving a supplier's product or warranty.

For each situation, identify the lead contact, the evidence needed, the person authorised to approve a remedy and the escalation route. Do not make customers repeatedly explain the same problem because two businesses are debating the cost.

Set internal response targets, but distinguish these from promises made publicly. Only publish a response commitment after testing whether the business can consistently meet it.

Test difficult cases in your existing operation

Use your current business as a pilot for complaint handling. The objective is not to produce a polished script; it is to discover where routine staff decisions require clearer guidance.

Run realistic scenarios: a defective item, incomplete work, an alleged safety issue, a complaint without a receipt and an online order disputed between head office and the outlet. Lack of a receipt should not automatically end an investigation; other evidence may establish the purchase.

Ask staff to work through each case without the founder making the decision. Record where they become unsure, what information is missing and how long a handover takes.

Create an urgent escalation route for alleged injury, unsafe products or serious service failures. These should not sit in the ordinary goodwill approval queue. Depending on the issue, specialist advice and separate reporting or recall procedures may be necessary.

Review the results for consistency. Similar circumstances should lead to a consistent assessment, while allowing for differences in the facts and applicable legal remedies.

Align authority, costs and records before recruitment

Your franchise agreement and operating procedures should work together. Ask your lawyer to address complaint cooperation, record access, authority to make commitments and the allocation of remedy costs. Avoid giving head office broad practical control while leaving its financial responsibilities unclear.

Distinguish the immediate customer response from the later allocation of costs. A franchisee, franchisor and supplier may need to resolve reimbursement between themselves, but that should not be used to evade consumer obligations.

Keep a proportionate complaint record: the transaction, issue, investigation, decision and action taken. Personal information must be handled consistently with the Privacy Act 2020. Limit access and avoid circulating unnecessary customer details across the franchise community.

Finally, review recurring complaints for operational causes rather than treating every refund as an isolated expense.

Practical takeaway: Before recruiting franchisees, test a complaint responsibility table, a legally checked remedies guide and an urgent escalation process in your existing business. Resolve unclear decisions before customers encounter them.