Allied Brands’ downfall won’t affect franchisees – yet

Allied Brands franchisees aren’t in any immediate danger following the company’s move into voluntary administration, according to chief executive Sean Corbin.

Allied Brands currently oversees major franchise brands including Cookie Man, Villa & Hut, Kenny’s Cardiology, and Awesome Water.

Last month, the company saw its Cookie Man chain placed in liquidation, and last week lost the Australian franchise rights to Baskin-Robbins.

In a bid to try and rectify the company’s situation, Peter Dinoris and Peter Biazos of Vincents Chartered Accountants have been appointed as joint administrators.

Villa & Hut founder Franz Madlener, who is attempting to repurchase the franchise, is expected to begin negotiations with the administrators.

Voluntary administration is designed to resolve a company’s future direction quickly, whereby an independent and suitably qualified person takes full control of the company.

Corbin says the company has been careful to ensure all franchisees remain in business, but the company stores will probably close if they’re unable to find a buyer or a franchisor.

He believes Allied Brands’ individual brands can still succeed providing they undergo some strategy changes.

“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,” Corbin says.

Allied Brands commenced in January 1991, with the signing of the Australian master license for the business of Baskin-Robbins.

The company listed on the ASX in 2004 but was dealt a major blow last week when it lost the Baskin-Robbins brand after global brand owner Dunkin’ Brands terminated the master franchise agreement for Australia.

The loss of the company’s flagship chain has left Allied Brands in a state of crisis. In the last year, it has closed its Awesome Entertainment business, attempted to sell its Awesome Water business and the Villa & Hut chain, closed several stores in its Kenny’s Cardiology stationery chain and watched its Cookie Man chain placed into liquidation.