Fast food franchise Souvlaki Hut, which was named as one of the fastest growing franchise networks in the country just 10 months ago, has been placed into voluntary administration.
Laurie Fitzgerald from BDO has been appointed as the company’s administrator. He was contacted for comment this afternoon but was unavailable prior to publication.
Souvlaki Hut managing director Bill Fotiadis and finance director John Fotiadis were also contacted for comment, but no reply was received before publication.
Individual franchisees appear to still be trading and sources suggest at least one party is interested in buying the company, which has more than 50 locations on the eastern seaboard.
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The Franchised Food Company, which operates the Cold Rock Ice Creamery and Nutshack franchise chains, has been named by one source as a potential acquirer.
Souvlaki Hut recently circulated an information memorandum among potential buyers and investors in the chain.
One franchise industry expert who viewed the information memorandum said the business did not appear to be in great shape.
“I get the impression they were all over the shop. It seemed to me they had tried various sizes of formats and it was not quite clear what was the best for them. And there were some legacy issues that needed sorting.”
Souvlaki Hut ranked third on the 2010 BRW Fast Franchise list, with revenue of $17.36 million and growth of 217.89%.
Founded in 2005, the company had outlined plans to expand into Western Australia.
Last year, Bill and John Fotiadis told SmartCompany the company attempts to scrutinise its franchisee as much as possible, knocking back nearly 30 candidates during a 2006 initial interview round.
The pair also said Souvlaki Hut attempted to weather the downturn by focusing on the “sub $10 spend”, with the company also pushing hard into a marketing plan with television and print advertisements.
“You would think business might be hurt with that type of marketing, but honestly, the families have just been running through the door. You’ve got to be in people’s faces, especially in a downturn. People have still got to eat,” Bill said at the time.
Both also said they had plans to take the business overseas once the expansion into all states and territories was complete.