03 Dec Franchise Network

Capability: Restructuring & Turnaround

Industry: Hospitality

Appointment: Voluntary Administration followed by Deed of Company Arrangement

Overview

A franchisor that operated over 18 company owned stores and franchised stores collectively throughout the east coast of Australia.

Challenges

 The company had various legal disputes with its franchisees and landlords and mounting tax debt that it was unable to repay. The company was also subject to an R&D Tax Audit that eventually yield an unfavourable outcome for the company and increased the company’s tax liabilities by over $500,000.

Solution

 Worked with management and successfully recapitalize the company to allow the company to continue in existence by reducing costs of operations through a deed of company arrangement. Following the restructure, control was returned to the directors.

 Greengate Advisory also managed a team of 50 employees across multiple stores within NSW, ACT, VIC and QLD to ensure that the business continued to trade with minimal interruption. Liaised with the landlord and other key stakeholders to ensure minimal disruption to business.

How Greengate Advisory can help

Greengate Advisory examines all options available for businesses by reviewing trading performance and considering non-financial factors to improve all stakeholders’ positions.

Early intervention is often the difference between successful restructuring or failure of the SME entity and avoids the destruction of the SME’s enterprise value. We will develop and implement strategies and we have the expertise to provide restructuring advice.