The sale of Allied Brands’ former franchise chain Cooke Man could be completed by the end of the week, although the liquidator of the group has denied Indian press reports that an Indian group has already purchased the company.
Liquidator Peter Hillig of Sydney insolvency firm Smith Hancock says reports that an Indian group had purchased the company were incorrect, but the Indian company is one of several parties still jostling for the business.
Hillig refused to name any of the potential bidders for the chain, but said he was hopeful of finalising a deal by the end of this week.
Cookie Man currently has 46 franchised outlets around Australia. Allied Brand’s financial report shows the company had revenue of $6.2 million in 2009-10, but posted a net loss of $2.6 million.
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Franchise Food Co had been interested in acquiring the chain, although some franchisees had been hopeful that the former owner of the company, Peter Elligett, could regain control.
Elligett purchased Cookie Man in 1997 with a group of investors before selling the business to Allied Brands 10 years later in a $5.1 million deal.
Elligett then became an executive director of Allied Brands, which was placed into the hands of administrators on October 27.
The collapse of the Cookie Man chain was the beginning of the end for Allied Brands. The New South Wales Supreme Court ordered that the business be placed in the hands of liquidators on October 3 after a petition from a disgruntled creditor owed about $3,500.
Incredibly, Allied Brands told the Australian Securities Exchange that it did not know about the liquidation order until after it was handed down, and so was not present at the court hearing.
Hillig has been trying to sell the business since early October, and appears to have received a good deal of interest.
India is one of Cookie Man’s biggest markets outside of Australia. The Indian business was established in 2000 and now has 13 stores, including four outlets in Dehli.
The master franchise for India is owned by a company called Australian Foods, which describes itself as an Indian-Australia joint venture.
While the fate of Cookie Man now looks clearer, its former parent company Allied Brands is still in a mess.
Earlier this week, the administrators of Allied Brands applied to the Queensland Supreme Court to delay a second meetings of creditors to allow more time for a full investigation into the company’s affairs.