Country Style closes 25 more stores

Under its Companies’ Creditor Arrangement Act protection – granted Thursday in an Ontario court – the company closed another 25 more Country Style stores, president Patrick Gibbons said in an interview. The closings bring the total number of franchised and corporate locations to 150.

The Globe and Mail
December 17, 2001

Country Style closes 25 more stores

Country Style Food Services Inc. has closed 25 more stores under court-ordered protection from bankruptcy so its struggling doughnuts and coffee chain can restructure.

Country Style, the third-largest coffee and doughnut franchisor in Canada, said 50 stores that were “bleeding” the company’s finances have now been shut.

The Toronto-based company had already cut 25 locations earlier this month, after issuing default notices Nov. 20 to outlets that were underperformaing.

Under its Companies’ Creditor Arrangement Act protection – granted Thursday in an Ontario court – the company closed another 25 more Country Style stores, president Patrick Gibbons said in an interview.

The closings bring the total number of franchised and corporate locations to 150.

However, Mr. Gibbons said he expects a restructuring plan under creditor protection could be completed by the end of March and will ore Country Style forward as a “very prosperous company.”

Country Style’s principal shareholder, CAI Capital Partners – the investment firm that brought Country Style from Maple Leaf Foods Inc. in 1999 in $45-million deal – has injected an undisclosed amount of new cash into the business, Mr. Gibbons said.


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Risks: Companies’ Creditor Arrangement Act, CCAA, Lease controlled by franchisor, Franchisor insolvency, intentional, 20 terminations turn into 200, Termination of franchisee, mass, Canada, 20011217 CS closes

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