Ex-Cheers franchisee jailed 2 years for misappropriating $319,000

SINGAPORE – A former franchisee of a Cheers minimart, who misappropriated the store’s daily sales proceeds and inventory totalling more than $300,000, was jailed for two years on Tuesday (May 10).

Azahar Salleh, 41, admitted to committing criminal breach of trust of $318,792 at the store at Block 303 Choa Chu Kang Avenue 4 between June and Oct 8, 2014.

The court heard that he entered into a franchise agreement with Cheers Holdings in May 2012, which licensed him to occupy and operate the store for seven years.

When the store was handed to him, it was stocked with inventory worth $100,000.

He had to maintain a “net worth” of $100,000 with Cheers Holdings. He paid $20,000 as a “net worth deposit” at the start of the agreement.

Part of his 49 per cent share of the monthly profit would go towards maintaining the net worth until it reached $100,000, after which he would receive his entire share of the monthly profit.

In November 2012, during a stock take, he claimed that there was a shortfall of $8,000 worth of merchandise, and the amount was deducted from his monthly profit.

For the next few months, Azahar claimed that he did not have any income and was forced to take legal and illegal loans, which snowballed to over $100,000.

Unable to repay the loans, he began misappropriating the store’s inventory from about June 2014.

Whenever customers bought items at the store, he would sell them without recording the sale in the cash register but would keep the money collected.

From September that year, Azahar also started misappropriating the daily sales proceeds of the store.

He was made bankrupt in the middle of last year.

His lawyer Gino Hardial Singh said his client had been a pioneer franchisee of the Cheers chain of minimarts. He tried his best to work as hard as he could, survive and repay his debts but was unable to cope.

“He had put his blood and sweat into his franchise for 24 months to no avail and subsequently saw no other alternative but eat into his own franchise with the hope of replacing what had been taken by him,” he said.

Azahar could have been jailed for up to seven years and fined for criminal breach of trust.



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