Wizard franchisee: "We would have said no to Aussie deal"

By Larry Schlesinger | 25 Feb 2009

A Wizard franchise owner, who spoke to Brokernews on the condition of anonymity, says many franchise owners are unhappy about the deal GE Money made with Aussie, and would have opposed it.

"Franchisees are up in arms," the franchise owner said.

"GE sold Wizard to Aussie without giving the Wizard franchise council (the representative body for all franchisees) any say in who it was sold to.

"If we had had a say, we would have said 'no' to the deal."

Responding to the comments, a spokesperson for GE Money said: "The [Wizard] Franchise Council was told very early on in the Wizard review process that we would seek their input on specific issues, and we kept them abreast of developments through the review.

"The Franchise Council could request a forum at any time during the Wizard review, and every request from the Franchise Council to discuss issues was met. However, we advised them at the outset that the Franchise Council wouldn't have a say on who any buyer might be."

The franchise owner told Brokernews franchisees have contributed to a legal fund to contest the terms of the sale of their businesses by GE Money to Aussie.

The franchisees are hoping to secure a better payout figure from GE should they decide not to accept the Aussie offer.

According to the franchise owner, most franchisees would have invested up to $150,000 each into their businesses.

From 2pm this Friday (27 February) GE Money will assign all franchise agreements to Aussie.

Those franchisees yet to decide if they will join Aussie, will then only be able to sell products off Wizard's "borrowers choice" panel. No more Wizard products will be sold.

According to the franchise owner, Aussie is offering $10,000 worth of free marketing to those franchisees who sign up on Friday.

If not, they have until 28 April to decide.

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Commented by: Realist at 26 Feb 2009 12:22 PM

It is a tough industry regardless of who you aggregate with. The Aussie Brand has opened hundreds of doors for myself and my business partner Gary. Lots of other Groups promise a lot. Aussie has always delivered for us. Their have been frustrations. However what business does not have frustrations. The Aussie Brand is second to Nunn. The consumers vote with thier feet.$10,000 of free marketing to market the strongest name in the business sounds OK to me.

Commented by: caring at 26 Feb 2009 12:39 PM
This looks like an organised stunt engineered by Aussie and a certain bank - with the MFAA standing on the sideline with a Stupid Smile on it's face

Commented by: Upset at 26 Feb 2009 02:40 PM

GE was wrong to rush a deal through with Aussie and the deal should have gone to NAB.

Obviously GE has now shown what type of company, or the people running it, are.

I am sure if the Franchise Concil heard how much better the deal being offerred from NAB was, then they would be even more upset.

WhHy did GE take the Aussie deal... I heard it was becuase they were not willing to provide any assurance arround how they will service the existing Wizard customers. In the end GE has done a poor deal.

Good one GE management, you have destroyed two great brands.

Commented by: Earl at 26 Feb 2009 04:18 PM

Wizard what a journey. They start by telling us that they are going to make us the most attractive franchise opportunity in the financial services market. Then the sub-prime crisis hits and they sent a mailout to all our clients telling them that we are part of the global GE group companies and that we have AAA credit rating. They then tell us in February 2008, that we are with a winner and that after all the others have gone we will be the only non-bank lender left standing.

Well GE you certainly got that wrong!
We now have no franchise
We no longer can lend money
And as of tomorrow we are no longer standing.
Thanks for nothing!!!!

Commented by: Wizard Principal at 26 Feb 2009 04:23 PM

James Symond has said that they will retire the Wizard brand for the time being, but consider the relaunch of a Wizard branded product in the future. What a ridiculous thought. There is no way they can resurect this brand after the damage being wreaked upon it by the tag team of GE and Aussie. Damage caused:
Not passing on the RBA rate reduction
Advising Existing customers to call Aussie (not their existing branch) to get a better deal
Advising existing customers that ONLY if they go to Aussie will they get their DAF waived (third line forcing)
Telling Wizard customers in writing to contact customer service for their needs (NOT their local branch)
Aussie advising existing Wizard branches that if they do not CHURN (yes that word was used) their existing book quickly enough, then they may get existing Aussie AMA's to assist - for that - read you lose your book.
If after that you believe that they will release a Wizard brand again, I guess you would also believe in the tooth fairy.

Commented by: Wizard Principal at 26 Feb 2009 04:29 PM

The utter arrogance in which GE has dealt with the whole sale is beyond me. They have not passed on the 1% rate reduction and are now giving customers the one and only OPTION to refinance through Aussie. This puts me in a position where for the sake of the customers I must look at an otherwise weak and flimsy franchise model that Aussie has put on the table. Proposed payout from GE is not close to the time and effort put into the business.If not for this border "Third Line Forcing", underhand manner of the deal, I would have told Aussie to shove it. At the moment I am waiting for more options. I really hope the MFAA, ACCC and other members of the industry pay further attention to this poor transaction.

Commented by: Wizard Principal at 26 Feb 2009 05:14 PM
The legacy GE will leave in the financial markets of this country will be adversely felt for decades to come.

Commented by: Wizard Principal at 26 Feb 2009 06:03 PM
GE should have checked the colour wheel prior to purchasing Wizard. Blue and Orange makes ???? And now we are all in it.

Commented by: Wizard Principal at 26 Feb 2009 08:24 PM
You may be able to make a dollar working from your bedroom, but if you had a shop in the real world, amongst real customers, and provided real service you and the rest of the Aussie shop less loan force would go broke.

Commented by: Avon or Amway at 26 Feb 2009 08:25 PM
I joined a brand that had purpose and was not based on a high volume tunrover of business writers. Now I am left with what appears to be no more than an Amway or Avon party plan business.....$10,000 of purple baloons does not sit well with me for all the bigh brand loan writers who pay nothing to benefit from.

Commented by: Mr W at 26 Feb 2009 09:25 PM

I agree, it does sound a lot like Amway, but so did Wizard

Realist (aka Justin Nunn) everyone needs to ask themselves these questions. What is the brand worth to me? Does it bring in enough to justify the slice of the pie they take?

It's going to be interesting to see how the integration works out. Mobile lenders may initially loose some leads to the branches. They say they're looking for opportunities in the market. Could they make another takeover and integrate another branch network, who knows

Anyway, we'll have to wait and see.

Commented by: Spread the word at 26 Feb 2009 09:37 PM

WHATS BEHIND THE CURTIN AT GE WHEN THEY LIST BILLIONS OF DOLLARS ON THEIR BALANCE SHEET AS "OTHER"...?

Put pressure on the rating agencies to downgrade their rating and send Jeffery up the hill on his hands and knees to beg for a GM bailout.

The time is coming but if you want to help it along,
tell everyone how you believe "GE HAS A LIQUIDITY PROBLEM, AND THAT YOU ARE BEING CAREFUL NOT TO BUY GE PRODUCTS." Tell your stock broker and your super fund manager you dont want exposure to GE. tell your friends, family and your local MP. Tell everyone you can. GE = LIQUIDITY ISSUES.

Commented by: Bagdad Bob at 26 Feb 2009 09:40 PM
Their are no probelms at GE. No Liquidity probelms. No rating issues. No need to use credit lines. No problems. We have lots of Money. Hail John McCain! - Bagdad Bob

Commented by: Wizard Principal at 26 Feb 2009 09:46 PM

I joined Wizard some 5 years ago. It was a great company with a great public profile until those two letters GE appeared. For a company that boasts to be AAA rated & one of the worlds biggest companies, well they did nothing but screw the brand. The screwed the brand, the principals, my family & now the customers that trusted us. Shame on you GE. You are nothing but a money hungry heartless company. Some of us have sweated for years to build a business & now you have taken it away & don't want to compensate us fairly. Fair GO.

Commented by: Wizard Principal at 26 Feb 2009 09:51 PM
Further to the last message. I hope the ACCC & the legal action being launched really hurts you both here & in the USA & you implode like all you buddies back home. HEARTLESS, SHAMELESS, GREEDY. All readers please boycott all GE operations in Australia, especially their ridiculuos high interest rate credit/dtore cards. Highway Robbers!! GO HOME GE

Commented by: Wizard Principal at 26 Feb 2009 09:52 PM
Just one word to describe GE: UN-AUSTRALIAN

Commented by: Wizard Principal at 26 Feb 2009 10:22 PM
As a member of the MFAA, I'd like to know why they are silent on this issue whilst their president (Aussie James) is destroying my business. We all know what GE represents, however, Aussie & CBA have given GE the vehicle to destroy our businesses and I hold them equally accountable for the position we're in.

Commented by: Observer at 27 Feb 2009 06:52 AM
I joined a brand to be a professional mortgage broker, now we have to consider being surrounded by 'mortgage gypsie's' that work out of their car boots who have no overheads and who have a turnover or business writers greater than my local McDonalds hotplate.....No thanks!

Commented by: Wizard Borrower at 27 Feb 2009 09:15 AM

I unfortunately have a Wizard home loan and have just received a letter from GE advising my loan will be rebranded AMS Mortgage Services, I cannot refinance as I am one of the many people affected by the Financial issues and am at present looking for work - I have not received the 1% reduction last given by the RBA and should rates reduce even further GE most probably wont pass them on either. The word around is that Mark B rang Aussie John and advised him what a good buy Wizard would be - this was done when the NAB deal was just about a done deal.

Commented by: Wizard Principal at 27 Feb 2009 09:40 AM

To the Wizard borrower above - please accept my sympathy regarding your situation, and the situation of thousands of others in your situation across Australia. As a Wizard Principal, this was never our intent. Most Wizard branches have provided sound advice and the best service in the market over time- resulting in a 98.8% customer satisfaction rating as per AC Neilson research. This was the highest score of any financial institution in Australia, and we all worked hard to achieve it.Today marks the end of an era. For those involved at the front line. Well Done. Be proud. You HAVE made a differrence. As for Mark Bouris going off to John Symond and telling him what a good buy Wiard was... don't believe it. Sure he had to present to them - that was his job. But I guarentee that it was the hardest thing he's ever had to do. Put yourself in his shoes - After creating something as strong as this, the last thing you'd want to do is destroy it in such a humiliating fashion as is occuring now.

Commented by: Wizard Borrower at 27 Feb 2009 10:01 AM

Thanks for your comments - I do understand where you are coming from in my part I have found the Wizard principals to be honest however since the takeover by GE unfortunately they have not had the support that was oroginally promised. Unfortunately GE have not lived up to their part of the bargin and delivered poor support to what was a thriving business not just in the Wizard brand but the wholesale side of the business also. It is a sad day for Wizard but in relation to Mark B and the original owners of Wizard they got their money in the sale to GE and I for one am glad to see the back of GE.

Commented by: Facts we need at 28 Feb 2009 11:34 PM
I think customers & principals are the ones having the acid blasted at them. Like being created on by your partner, how do you trust again (or sign another 5 year agreement with Aussie)?

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