Hi Beachflower,
I want to be sure I'm understanding the finer details of this. What I think you are describing is that there is actually just one business: Corporate Data Recovery, but that they have built 4 different websites representing the main business + 3 different cities. Is that correct? (Please let me know if I've misunderstood).
But, if I'm understanding correctly, then, yes, this is a problem. As things presently stand, Corporate Data Recovery would be allowed to build just one Google My Business listing and 1 set of citations across the various platforms to represent it. It would not be allowed to build citations for the Brisbane, Sydney and Melbourne websites that have been built.
If the business wants to keep running the 3 city websites in addition to the Corporate Data Recovery site, they should:
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Remove all addresses and phone numbers from those city websites. They should each have their own, unique phone number and should not be citing the physical address of Corporate Data Recovery in any way.
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Be sure those sites are not duplicating one another's content in any way
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Be sure those sites are not using bad cross linking practices in an attempt to promote one another (see Rand's recent Whiteboard Friday on this: https://moz.com/blog/backlinks-maximize-benefits-avoid-problems-whiteboard-friday)
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Be sure you are not building citations for these location-less city sites. If citations exist, close them.
To bring some further clarity to this, businesses sometimes create this scenario your client is in because they are trying to hone in on a particular geography/keyword via the creation of a mini-site for that phrase. While this can sometimes work at winning specific traffic, it's important to understand that these mini/multi sites do NOT represent local businesses. They represent keywords. Corporate Data Recovery is a local business with a physical address and phone number, but the Brisbane/Melbourne/Sydney sites are NOT local business websites: they are simply marketing materials, and therefore, ineligible for many of the tactics one would use to promote a local business.
The main danger here is that the multi-site approach will actually weaken the NAP (name, address phone) clarity of Corporate Data Recovery (the actual local business). So, if the client wishes to continue running those other sites, they should implement the 4 practices I've highlighted, above, to lessen risk of negative outcomes.
It's because of the complexity of scenarios like these that many Local SEOs will advise clients to build a single, powerful website for their brand, with content on it targeting each of their desired terms/markets. It's a great deal simpler to market a single website, with no concerns about NAP degradation, duplicate content, etc. That being said, there are some cases in which mutli-sites can be valuable, if the company knows how to manage and use them properly, resulting in benefit to the business, rather than harm.
Hope this helps!