A franchise group which includes the food chains New York Pizza and Hombre Mexican Cantina has gone into administration owing more than $500,000.
The Franchise Retail Brands group was formed in 2016 with the stated aim of bringing non-competing food brands under one umbrella and providing support in areas such as marketing, finance and legals.
The group directors also had ambitions to float the business in August 2017, a plan that didn’t eventuate.
Instead the business has found itself in administration. GM Insolvency was appointed as administrator on Wednesday 24 January 2018.
Ginette Muller, principal at GM Insolvency, told Inside Franchise Business, “The company is currently not trading and various parties are considering a rescue plan.
“This might come from shareholders, from directors, or elsewhere. We are exploring all avenues. It’s early days.”
Muller said another option could be to sell off the assets, the intellectual property of the company.
New York Pizza Slice was sold to FRB by Todd McGregor in 2016 after he had spent four years building up the brand. Hombre Mexican Cantina was the second existing franchise operation to be acquired by the group.
Last year established brand Shingle Inn Cafes was considering coming under the new group’s wing but pulled out of the proposed agreement.
Andrew Bellchambers, owner and co-director of Shingle Inn, told Inside Franchise Business, “We were in discussions and negotiations about joining the group. We negotiated terms but they were never completed, and FRB didn’t meet certain requirements we’d put in place.”
Bellchambers said several changes to the board and management had not instilled confidence in the business.
FRB also had three in-house food concepts developed: The Dessert House, Crave Ice Creamery and cafe chain Sabatini’s. The coffee roaster 1582 is also part of the business.
Current FRB director Bruce Dwyer joined the business late in 2017 and according to the Courier-Mail Dwyer is hopeful that creditors will accept a deed of company arrangement to allow the business to trade out of its current difficulties.
The Courier-Mail reports franchisees are still trading, although some Mexican restaurants are now with another franchise.
Bruce Dwyer has been contacted for comment.
Sean Corbin, former director, exited the business in December 2017. He is now heading up Phoenix Food and Coffee, a south east Queensland business that includes Burger Addicts, Azteca Mexican and Cobbers.
Corbin told Inside Franchise Business FRB had looked at but failed to get mezzanine funding to cover the gap left after the company pulled out of its proposed float.
So was the business overly-ambitious in its goals to take the brands to a float?
Not so, said Corbin.
“FRB formed to rollup very quickly, to go to a listing, and have the board and senior staff needed to put out a prospectus,” he said.
- The first creditors’ meeting for FRB will be held on 6 February.