Eagle Boys founder Tom Potter: I offered to buy Pie Face too
Wednesday, January 7, 2015/
One of Australia’s most well-known franchisors says he also offered to buy pie franchise Pie Face while it was in administration but administrators Jirsch Sutherland failed to follow up on his bid.
Tom Potter is best known as the founder of pizza chain Eagle Boys but he has a wealth of other franchising experience under his belt.
Potter has served on the board of several retail companies, including bakery franchise Brumby’s. More recently he has built the Crusty Devil Bakehouse franchise, while also serving as chairman of burger chain Burger Urge.
Speaking to SmartCompany this week, Potter says he contacted Jirsch Sutherland on multiple occasions to attempt to speak to the administrators about his interest in purchasing the franchise.
Potter’s revelation comes after Franchised Food Company chief executive Stan Gordon told SmartCompany he also had difficulty reaching the administrators to discuss buying the company, which entered voluntary administration in late November.
This week Gordon labelled the administration process as “disgraceful”, after Pie Face creditors voted to support a Deed of Company Arrangement (DOCA) to save the company from liquidation in late December.
But Jirsch Sutherland managing partner Sule Arnautovic told SmartCompany Jirsch Sutherland only received one offer for part of the Pie Face group, but the offer was not “remotely close” to the proposed returns to creditors under the DOCA.
In emails seen by SmartCompany, Potter clearly stated to Jirsch Sutherland that he was an “interested buyer”.
Potter also expressed an interest in acting as an adviser or management consultant to the administrators “on various areas of the business including franchising, production, overall profit and future options evaluation, marketing”.
“I wanted to advise you over the last few years other than being partially retired I have built the Crusty Devil Bakehouse model from scratch … and have intimate knowledge of the pie, café, bakery business,” Potter wrote in one email.
Potter sent emails to Jirsch Sutherland on December 9, 10, 11, 15 and 23. On one occasion he received a response to say his details had been passed on the administrators managing Pie Face but says it wasn’t until Christmas Eve that he received a phone call to inform him that a sale process would not proceed.
Potter told SmartCompany he was serious about his offer and he wouldn’t have contacted Jirsch Sutherland if he wasn’t.
“I made multiple approaches to buy Pie Face but I was ignored three times,” Potter says.
“I received one email saying ‘I’ll pass on the information to the person handling the administration’ but I didn’t hear a word until Christmas Eve.”
Potter says he was unable to specify an amount he was willing to pay for Pie Face as he did not receive an information memorandum.
Jirsch Sutherland managing partner Sule Arnautovic confirmed this to SmartCompany this morning, saying Potter never made a formal offer for the business.
“They never signed a non-disclosure agreement, they never even got to the first formal stage of the acquisition process,” Arnautovic says.
“They never paid the $40 fee to receive the summary information memorandum, they never made any offer, they never did any detailed due diligence via us or the Pie Face management team.”
“Mr Potter offered his services as a consultant to Pie Face and any interest he had in acquiring the business appeared to be secondary to his desire to provide services to the Pie Face Group.”
While Potter says it is “hard to know” what improvements are needed to the Pie Face business, he says he would have “looked at it as a turnaround”.
“I would have worked at turning around the business quickly and then decide what to do. It would not have been a long-term interest.”
And like Franchise Advisory Centre executive director Jason Gehrke, Potter also questioned the benefit to Pie Face creditors of the DOCA that was accepted at the end of December.
“The big question is why the creditors would accept a deal that would pay them 14 cents in the dollar in two years’ time,” he says.