A long term newsagency family with two businesses was finding things tough. They had been trying to negotiate a solution to an expensive lease in a shopping centre, relying on help from an advisor with whom they had had a commercial relationship for such matters.
With each offer rejected and cash reserves perilously low, they decided to close the business. The landlord agreed.
They were shocked to discover a close business associate of their advisor, someone well connected with the company their advisor is part of, signed a lease for a newsagency business for the space they vacated, a considerably better lease than they were advised the landlord would agree to for them.
Their many years of work building goodwill for the business was lost when they gave up the tenancy. That goodwill is the gain of the party stepping into what was their space.
While I am no lawyer, here are questions one could ask the advisor, the business they are part of and the landlord:
- How do you explain your associate getting a better rent deal than the newsagency family, who are also business associates?
- When was the first discussion with the landlord about a possible change of tenant?
- Who instigated the discussion?
- What specifically was discussed?
- Did you disclose the details of all discussions between yourself and the landlord with the newsagency family? If not, why not?
- Why did you not ever disclose that another party, also a business associate, might be interested in the business of the newsagency family?
- What are your financial dealings with the associate who has not got the tenancy?
- Is the associate who has not got the tenancy in a commercial relationship with your business similar in nature to that the newsagency family had with your business?
- How many other times when you have been negotiating on behalf of a business associate has the landlord rejected their offer only to subsequently accept an offer from another party with whom you are associated?
- What are your qualifications to represent any tenant in negotiations with landlords?
- What are your qualifications to represent the interests of the newsagency family?
- How was the transaction but to Tatts? What specifically did you or your associate represent to Tatts?
I would also seek access to all correspondence, written and electronic, between landlord representatives, the advisor, the now new tenant and any related parties.
This could be a case worth litigating as I see it happening too often. It would only be through litigation that the matter could be properly and fully explored. However, our channel being what it is, individual newsagents rarely litigate.
Note: To avoid litigation against me and to protect those involved, identifying details of this story have been necessarily left out.
Mark,
I don’t dispute that many in the industry are of the cesspool variety.
But I see circumstances where a different spin can be placed on the above events. There is a business very close by me where the final outcome has no one lamenting over the loss of the former operator. And I doubt there was any goodwill in your instance otherwise the incumbent could have sold the business.
I heard the owner agreed to sell the stock to new owner. Not sure if thats true. Sounds extremely unconscionable in amy event.
Colin there was goodwill. The owners are good people, hard working, providing good customer service. They were happy to stay if they could get a better rent deal.
I agree there are some stories where a closure is the best in advance of a new operator opening. In this instance, however, it is the conflict of interest of the service provider that bothers me.
Jim I doubt we are talking about the same business.
The one i refer to is in the sunshine state. The new tenant is renowned for pulling this trick. Not sure how he is able to get a tatts licence.
As I mentioned in the post: To avoid litigation against me and to protect those involved, identifying details of this story have been necessarily left out.
Have you been in contact with the old owner to ascertain said details? Or is this heresay?
Was it a Newsexpress outlet?
No, Ken.
Due to rumours circulating on above we wish to advise this information does not pertain to the Newsagencies owned by us in Maroochydore
That reads like something a lawyer says you have to write.
Henry & Dianne,
I feel for you that you have the need to distance yourself from an unsubstantiated post. Keep calm.
It’s not an unsubstantial tilted post Colin. It deliberately does not include anything to identify the location for the specific reason I detail in the post. An unsubstantial tilted post would be one where I make a specific allegation about a party without proof.