SINGAPORE (March 12): YuuZoo Corp stands by its accounting policies for its franchise operations despite the criticism it has received, the company’s executive chairman Thomas Zilliacus told minority shareholders at a dialogue organised by the Securities Investors Association (Singapore) on March 7. Responding to a question from SIAS president David Gerald, Zilliacus adds that he does not think the regulators understand his business. His comments come after the company was hit with a compliance notice and queries from the Singapore Exchange on March 5.
Zilliacus says YuuZoo owns stakes in 65 companies in 50 countries across Africa, Asia and Europe. These companies acquire from YuuZoo a franchise licence for software to run a social e-commerce network. “All of the franchisees are independent operations [that] run the franchise as their own business and share revenue with us. They buy from us the licence, the rights to run the franchise in a specific market. They pay — and this is something that we have agreed with our auditor, RT — a fixed fee based on the cost of the software that has been developed,” Zilliacus says.
YuuZoo is paid by these franchisees in shares rather than cash. “It’s not [just] that we accept the payment [in shares], we want the payment in shares. Why do we want that? Because if [a franchisee] is successful, the share value will go up and we can sell the shares on the market and deliver to you, our shareholders, the dividends, much more than we could ever have given if we had asked for a one-time fixed cash fee upfront,” he adds... (Click here to read the full story.)