U.S. firm plans chain of shops

Press, 19 July 1983, Page 24

U.S. firm plans chain of shops

By

SIMON COLLINS,

Herald”

The world’s biggest computer chain, Computerland, wants to open six shops in New Zealand next year. But it may face a legal battle over its name.

The name was registered in this country about five years ago by Peter and Cheryl McKay, who use it to sell Commodore and IBM personal computers in a shop in Anzac Avenue, Auckland.

The managing director of Computerland Australia, Ltd, Mr Darryl Rudolph, visited them in May to offer them a franchise in the worldwide Computerland chain. The couple rejected the offer. They would have been exempted from paying the normal $35,000 franchise fee, but would have been obliged to pay 8 per cent of their profits to the world organisation. They were offered no money at all for the name.

Mr Rudolph confirmed to me from Sydney that his company was “in the process of taking all the appropriate steps to setting up an organisation in New Zealand.”

The group already has 17 stores in Australia. The world Computerland organisation has 440 stores, and plans to have 615 open by the end of this year. With the boom in home computer sales, Computerland has become one of the 500 biggest companies in the United States.

Mr Rudolph said there

of the “New Zealand

was “potential for a minimum of six stores” in New Zealand: in Auckland, Hamilton, New Plymouth, Wellington, Christchurch, and Dunedin. His company planned to advertise early next year for franchise-holders in each of those cities, and was already in contact with “a couple of dozen” interested people. He said his company was now “looking at options” on the name issue, and he refused to comment on whether it might set up in New Zealand under a different name. Because the company operates by franchise, with each store independently owned, it would probably not fall foul of New Zealand foreign investment regulations. However, its arrival could cause a shake-out among existing New Zealand computer dealers, because its size enables it to negotiate big discounts direct from American computer manufacturers.

The Auckland “Computerland” store also fears that the overseas giant could win the name battle in New Zealand simply by using all legal avenues until the New Zealanders could no longer afford the necessary lawyers’ fees. “That is our biggest single worry," said a spokesman. “But we firmly believe that they cannot take the name.”