The new owners of the Grout Pro Australia business have signed contracts with 11 existing franchisees after taking over the business in June 2012 following its liquidation.
Geoff Biddle and Wayne Burns spent “less than $1 million” buying the rights to operate the Australian tile and grout restoration business with Biddle holding 75% of the company and Burns the remaining 25%.
Biddle told SmartCompany the purchase by the pair saved Grout Pro from liquidation and provided security to the existing franchisees.
Grout Pro was established in New Zealand three-and-a-half years ago and the New Zealand owners brought it to Australia in late 2010 using a master franchisee model, with one master franchise in Perth and one in Brisbane.
Biddle says the New Zealand owners successfully operated the business for about 12 months, with the master franchises signing up 22 franchisees “until it all fell apart”.
He says he is limited in what he can say about the downfall of the business due to pending legal proceedings between the master franchisees and the former owners.
“Unfortunately the owners actually liquidated the franchisor company they had set up to limit their exposure,” Biddle says.
“What that meant was that all the existing 22 franchisees ended up with no agreement.”
Biddle had been looking to buy a business for a while and spotted Grout Pro following its liquidation when the business was placed on the market by a franchising broker.
“I, together with one of the ex-franchisees [Burns], saw the promise in the business model and the products and services being offered and we have together teamed up and taken control of the company,” he says.
“It’s great to see an ex-franchisee who has been through the mincer having purchased and lost the franchise is so confident in what the business has to offer that they bought it.”
Of the 22 franchisees that had been recruited, Biddle says some of them immediately went and did other things and, by the time Biddle and Burns got involved in May this year, there were 16 remaining franchisees, of which 11 signed up with the new owners. The remaining five have rebranded to do the same work under their own names.
“Now it is business as usual, we are publicising in every way that we can and we are overhauling the website, getting involved in social media and we are trying to recruit as many franchisees as we can.
“It’s early days but we are very excited about the future and we are certainly paddling hard.”
To keep up to date with all the latest issues in the world of franchisng, make sure to read franchise expert Jason Gehrke’s regular blogs for SmartCompany.