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Retailers - Alex Yau
February 24, 2014
Franchisee in Basildon shuts up shop over EE partner payment dispute
An ex-Chitter Chatter franchisee in Basildon has accused the EE retailer of causing the store’s closure by withholding £20,000 of outstanding commission owed over two years.
Vince Askem opened the Chitter Chatter-franchised store in January 2012. He claims he was forced to close just before Christmas when his money ran out.
Askem said a recent excuse was that Chitter Chatter was allegedly owed £3.7 million by EE. Yet EE told Mobile News it has no current outstanding issues with Chitter Chatter.
“I never received a single payment, commission report or invoice from Chitter Chatter, despite numerous requests and promises of payment,” Askem told Mobile News.
Broken promises
He explained that Chitter Chatter gave him occasional advances of around £3,000 to maintain the running of the shop and to pay staff wages. However, he claims this still left him a shortfall of £20,000.
“It has been one broken promise after another. We didn’t have customers, we had friends. That’s the only way we kept going. Parents and teachers are approaching my son at school, asking why I closed the shop. ”
Askem has played Mobile News some of his recorded conversations with Chitter Chatter in which the firm did not appear to deny its liability to him.
Chitter Chatter director Richard Wortley said: “This is a private matter between Chitter Chatter and its former franchisee. It does not involve our unique relationship with EE, built upon mutual trust developed over our 20-year partnership”.
Askem said he invested £50,000 into opening the store. He spent a further £130,000 to pay staff wages and business overheads. Askem said that, as part of the franchise agreement, Chitter Chatter would run his books and pay monthly commissions promptly. He added despite chasing another Chitter Chatter director, Ben Willis, none of his invoices were ever settled.
In December, Askem discovered Chitter Chatter had not paid his rent for five months, leaving him with a £16,000 liability to the landlord. He closed the store on December 20 and says Chitter Chatter warned him not to put a sign in the window claiming financial difficulties as this would threaten ongoing revenues. He was informed to tell customers to contact head office with any queries.
“I am told they had an agreement with the landlord that rent would not be due until February when they would resume payment plus the accrued arrears.”
Askem told Mobile News he was still waiting for all payments and commission reports and had still not received the £20,000 he says Chitter Chatter has agreed to pay.
