Allied Brands loses Baskin Robbins franchise rights, receivers appointed to subsidiary

Listed franchise brand manager Allied Brands now looks perilously close to collapse after the company was stripped of its Australian franchise rights for the Baskin Robbins franchise by the US owner of the brand, Dunkin’ Brands.

As a result of the termination, Westpac has appointed McGrath Nicol as receivers and managers of an Allied Brands subsidiary called Allied Brands Services.

Dunkin’ Brands says it will now directly support franchisees itself.

“Dunkin’ Brands is completely committed to the Australian market and believes there is great potential for future growth,” Dunkin’ chief executive Nigel Travis said in a statement.

“We look forward to a seamless transition with Allied Brands and providing our franchisees with a renewed platform for growth.”

Allied Brands said in a statement that it was “disappointed that a settlement could not be reached with Dunkin’ Brands and reserves its rights with regards to damages caused by the termination of this agreement.”

Allied says it is “assisting Dunkin’ Brands in transitioning the business so that it causes a minimum disruption to Allied Brands former franchisees” but admitted its future looks grim.

“Allied is in discussions with its secured creditors and will notify the market as soon as decisions are made regarding the position of the company and its remaining companies,” the company said in a statement.

According to Allied’s most recent financial statements, Baskin Robbins accounted for about 21% of Allied’s total revenue in 2009-10. But the chain was also home to the bulk of Allied’s franchisees.

Earlier this month, Allied chief Sean Corbin admitted losing the Baskin Robbins franchise rights would make it hard to save the group.

“If we can’t negotiate something with Dunkin’ Brads in the US, it’s going to be very difficult to save the company,” he said on October 7.

Sean Corbin was not available for comment prior to publication.