Franchising, Retail

Oliver Brown set to emerge from voluntary administration

Eloise Keating /

Belgian-inspired chocolate cafe chain Oliver Brown is set to emerge from voluntary administration, after creditors of the company voted in favour of a Deed of Company Arrangement put forward by the company’s director.

Administrator Timothy Heesh of TPH Insolvency was appointed to the brand’s operating company Doutmost Pty Ltd in early May, casting doubt on the future of more than 50 Oliver Brown franchise stores.

However, the company announced on Monday that it is preparing to exit voluntary administration over the coming weeks with a renewed focus on making the brand “accessible to more Australians”. 

The Oliver Brown stores all continued to trade throughout the voluntary administration, although two outlets, in Weatherill Park and Sydney’s World Square, had separately been placed in liquidation and administration before TPH Insolvency’s appointment.

Oliver Brown had previously been placed in voluntary administration back in 2012, as a result of a dispute between shareholders of the business.

According to reports in June, the company entered voluntary administration this time around owing creditors $29 million, while company director Eric Song had reportedly contested a $5.1 million tax debt identified in 2016.

Seeking to recover this debt, the Australian Taxation Office reportedly issued garnishee notices to franchisees instead of head office. The ATO was said to be claiming $5.2 million in liabilities, while landlords were reportedly owed more than $20 million.

A spokesperson for TPH Insolvency confirmed to SmartCompany the Deed of Company Arrangement was supported by creditors of the company. One Oliver Brown store closed during the voluntary administration process, and another two outlets may close soon.

In a statement, Oliver Brown said Song is “humbled and thankful for the continued support of suppliers, creditors, staff and franchisees”, while also “saddened” by the impact of recent events on staff and franchisees. He also thanked the administrators and the ATO.

“Although Oliver Brown’s management does not agree with the assessment of the ATO and had hoped to resolve these matters prior to this juncture, they have seen it as an opportunity to implement industry leading governance and accounting systems,” the company said.

Oliver Brown has also appointed a new general manager to the business, Ben Nash, who has been consulting with the company for the past 12 months.

“The great thing that was revealed in this process has been the strength of our group and the viability of our franchise model,” Nash said in the same statement. He said his priority will now be focusing on customer experience.

“Focusing on the end customer experience and value will allow us to better serve them, which in turn will increase our spend per customer and retention and lead to better franchisee return, which is a key priority for me,” said Nash.

Meanwhile, the company said its management will also be focusing on its digital marketing initiatives, staff training and onboarding, improving efficiency and cost of goods sold, developing strategic partnerships and “grow[ing] the brand to other parts of Australia”.

NOW READ: Donut King’s days may be numbered, but Crust and Gloria Jean’s are safe

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.

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