Food wholesaler In2Food is advertising for new franchisees to join the business, as documents filed with the corporate regulator shows the business owes more than $53 million to creditors, including small businesses.
In2Food collapsed into administration in mid-August, citing the ongoing disruptions caused by lockdowns; however, the business is still trading as a sale process continues.
The business was formed in 2018 through a merger of seven other food businesses and also trades as Yarra Valley Farms Australia. It supplies fresh produce — which it purchases from small farms and producers — to supermarkets, cafes, restaurants, aged care facilities and schools.
The business has 17 ‘territory managers’ or franchisees, according to a post from an employee on LinkedIn, and is currently advertising eight new franchise opportunities on AnyBusiness.com. The cost of buying a franchise is listed at $7,500.
In a video on Facebook in November 2020, In2Food chief executive Bill Kollatos said the company was seeking new franchisees across all Australian states and territories, and franchises would suit “entrepreneurial” people who had worked in hospitality or food service and wanted to “stay connected” to the industry after a challenging 2020.
However, those challenges continued well into 2021, with Kollatos telling staff in August the company needed to enter voluntary administration due to “the disruption of snap lockdowns in multiple states, in combination with the problematic retail journey within the Ready To Eat meals category”.
Deloitte administrators Jason Tracy and Salvatore Algeri were appointed to oversee the administration process on August 13, with FTI Consulting subsequently appointed as receivers over the business.
According to a report from receivers submitted to the Australian Securities and Investments Commission and published here, the company and its related entities owe $53 million to creditors.
The biggest creditor is the Commonwealth Bank, which is owed $24.4 million, and its South African parent company says it is owed $12.5 million.
However, many of the creditors are small farming and produce businesses, some of which are owed tens of thousands of dollars.
In the report, receiver Kathryn Evans from FTI Consulting, said the business had “significant property, plant and equipment and intangible assets”, however, the value of such assets could not be disclosed as it may affect ongoing sale negotiations.
The report states that the company is owed close to $10 million, but the source of that debt has not been disclosed.
According to the Herald Sun, the business has been able to keep staff on during the administration, but hours have been reduced.
SmartCompany contacted Deloitte for comment, but was directed to FTI Consulting, which declined to comment on the receivership.
SmartCompany has also contacted Bill Kollatos for comment.