Billy Baxters faces winding up

A representative of Paradise Retail Holdings returned The Advertiser's call, saying he was “bemused” by the matter - before saying he was “not in a position to answer any questions” relating to the winding up application and its potential impact on the Billy Baxters brand.

Adelaide Now
July 11, 2012

Billy Baxters faces winding up
Russell Emmerson

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Restaurant chain Billy Baxters is facing a demand for payment.

NATIONAL restaurant franchise Billy Baxters is facing a winding-up application over a $1.2 million court debt.

Billy Baxter's (Franchising) Pty Ltd is connected to more than 20 family restaurants throughout Australia and is part of the Paradise Retail Holdings group, which also runs the franchised businesses of Pets Paradise, Global Pet Products and Warner Bros' Australian retail operations.

Despite the group's declared $16.5 million after-tax profit in 2005-06 (the last time financial results were lodged with company regulators), the Billy Baxter's franchising group has allegedly not paid a Victorian Court of Appeal judgment awarded in April, according to documents lodged with the Federal Court.

The documents allege a statutory demand was made for the payment of the $1.2 million judgment plus costs but was not paid or disputed within the required 28 days.

The Federal Court can order a company be wound up if that lack of payment is proven and the demand process is not shown to be flawed.

Franchisee Trans-It Freighters Pty Ltd sued Billy Baxter's (Franchising) over the failure of its new Glenelg franchise, saying it was misled by representations of revenue and profit that could be made in the first year.

The Victorian Court of Appeal found that franchisor representative and Norwood store operator Phillip Mauviel said the new store could turn over $1.3 million based on Norwood results, and suggested that would allow for payment of rent in the Jetty Rd tourist area and an acceptable profit.

The Court held in April that Billy Baxters had given the potential franchisees the required warnings to get independent financial advice but ultimately there was “no logical connection” to support the estimates - a decision expected to convince franchisors to clamp down on information relating to future earnings estimates.

The Court ordered payment of $1.2 million plus costs - an amount that serves as the basis for the current winding up action.

Neither company directors for Trans-It Freighters nor their lawyers, DMAW Lawyers, would discuss the matter when contacted yesterday.

A representative of Paradise Retail Holdings returned The Advertiser's call, saying he was “bemused” by the matter - before saying he was “not in a position to answer any questions” relating to the winding up application and its potential impact on the Billy Baxters brand.

There are 13 Billy Baxters restaurants in South Australia.

http://www.adelaidenow.com.au/business/billy-baxters-faces-winding-up/story-e6frede3-1226423779563


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