The Hard Rock Cafe franchises in Australia have been purchased by serial entrepreneur Jeff Beaumont, saving the well-known cafes from financial ruin.
Beaumont has purchased the cafes currently in operation in Sydney and Surfers Paradise after they were placed in voluntary administration in June this year with a debt of $4 million, but the entrepreneur has plans to open a new cafe at Sydney’s Bondi Beach, according to reports.
Accountancy firm Cor Cordis was appointed as administrator in June, but the administrators were unable to comment prior to publication.
The purchase of the business by Beaumont was confirmed to SmartCompany by a current Hard Rock Cafe employee in Sydney, but Beaumont is yet to respond to interview requests.
The Sydney Morning Herald has reported more than 100 employees were owed a collective $1 million in unpaid entitlements and as part of the deal Beaumont indicated he would pay the majority of this debt.
But the remaining 100 creditors not employed with the company will be unlikely to recoup their losses.
The Australian franchises have been owned by Lennie Huntly and David Rich since 2007, and in 2011 there were reports the pair were planning to open new sites. Huntly had previously been the general manager of the Hard Rock Cafe Sydney.
In 2009 Huntly was quoted in Hospitality Magazinesaying he wanted the brand to become “relevant to the Australian public”.
“We both have a long history with Hard Rock and being an Australian-based company feel we know what will appeal to our local market. We are eager to build and re-position the brand through a strong alignment and support for live Australian music and believe the local market will embrace the revitalised Hard Rock concept,” he said.
In November last year Huntly’s business partner David Rich was declared bankrupt, according to The Sydney Morning Herald, a sign of the financial difficulties faced by the cafes which would months later be revealed.
Creditors of the business include the Australian Taxation Office, Hard Rock Cafe International and food and beverage wholesalers.
Beaumont was quoted in The Sydney Morning Herald as saying he intends to “make the best of a bad situation”.
“There have been so many costs to bring the business back up to speed, but we’re getting there,” he says.
“Three parties bid for this business. Thankfully, we were successful because we are honouring both the staff and their entitlements. From this day forward, it’s about keeping the heart and soul of the brand ticking forward.”
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The first Hard Rock Cafe opened in London in 1971, but came to Sydney’s Crown Street in Darlinghurst in 1989. It became a hotspot for celebrities and was filled with rock ‘n’ roll memorabilia.
The company’s first employee, a waitress named Rita Gilligan, is still with the company 42 years on.