Coffee collapse: Tax debt brings coffee franchisor down but stores trade on
Friday, September 28, 2012/
The company behind the Bean Bar coffee shop franchise has entered into liquidation after being pursued through the courts for outstanding tax debts, but the franchisor has now sold the business and is planning an expansion.
Basset Holdings, the franchisor of the South Australian Bean Bar chain, has been embroiled in legal proceeding brought by the Australian Taxation Office.
Last week the Federal Court ordered the winding up of Basset Holdings and the appointment of Nick Cooper of BRI Ferrier as official liquidator of the company.
The chain started in 2001 and has eight stores, the most recent of which opened in July this year.
Ron Basset, the sole director of Basset Holdings, told SmartCompany all the stores, including the seven which are franchises, will continue to trade and it is “business as usual.”
Basset says he cannot reveal the amount of Basset holdings tax debt as “it is a matter between the liquidator and the ATO”.
“It is not a large amount, it is less then the sale price of the company,” he says.
“Had the ATO waited as they gave us the impression that they would, there would not have been any need for them to take action.”
In a statement, Basset revealed related company Bean Bar International has contracted to purchase the Bean Bar business and has plans to expand the network interstate to New South Wales, Queensland and Western Australia.
“Bean Bar Cafes are in detailed and advanced discussions with a public company to facilitate and fund both the expansion plans and branding exercises required to achieve key footprints in emerging Asian markets,” the statement said.
“Over and above this, negotiations continue with several parties associated with the master franchise rights for Singapore, Hong Kong and China.”
Cooper was unavailable to comment to SmartCompany but previously told Adelaide Now that questions remain about the last-minute bid to sell the business to Bean Bar International.
“There was a sale contract for the company’s franchisor business signed before the company entered liquidation in favour of a related party,” he said.
“I am currently reviewing this contract to determine whether the proposed sale was on commercial terms.”