Allied Brands collapses into administration

Listed franchise brand manager Allied Brands has lost its battle for survival, with the company placed in voluntary administration this morning.

However, chief executive Sean Corbin has told SmartCompany that all current franchisees will remain open for business, and have stock to continue trading, while the administrator sorts out the next steps for the group.

“Through the whole process we’ve tried to be careful to ensure that the franchisees stay open,” Corbin says.

“What will happen – and it’s not my call – is that the company stores will probably all get closed eventually, if they cannot find a buyer or a franchisor to take them on.”

Peter Dinoris and Peter Biazos of Vincents Chartered Accountants have been appointed as joint administrators, although Corbin says that not all of the company’s subsidiaries have been placed in administration at this stage.

Allied Brands, which saw its Cookie Man chain placed in liquidation last month and then last week lost the Australian franchise rights to the Baskin-Robbins brand, has only a few remaining brands:  Villa & Hut, which founder Franz Madlener is trying to buy back; Kenny’s Cardiology, which is also close to being sold; and Awesome Water, which is still operating.

Madlener, who has been negotiating with Allied Brands for more than a month, is now expected to begin negotiations with the administrators.

Corbin says Allied Brands was given little room to move when it lost the Baskin-Robbins brand, after global brand owner Dunkin’ Brands terminated the master franchise agreement for Australia.

“This has been a long, tiring process. The hope was that there was funding coming. We had agreements in place, but the once Baskin-Robbins threatened to terminate the license, people got nervous,” Corbin told SmartCompany.

Corbin says he believes the individual brands under the Allied Brands umbrella can still succeed. He says the Baskin-Robins brand remains strong, and Cookie Man, Villa & Hut and Kenny’s Cardiology could all be profitable with some strategy changes.

“The brands that we were looking to hold on to were strong, given good management.”

“The frustrating point personally is that there were strategies in place, and funding, to take the company forward. But once events transpired that wasn’t possible.”