With 15 of its 21 Australian stores in Adelaide, Billy Baxter's future is in limbo

All 21 stores across the country - including 15 in Adelaide - are in the hands of individual operators that pay fees to the franchisor company to use the brand and for shared marketing.

They may have to "debadge" to operate as individual cafes.

[…]

Federal Court Registrar Patricia Christie said there was enough evidence to show the company was transferring assets in the weeks after it became liable for the debt - transfers likely to raise doubts over whether the Pollards could recover the amounts owed for the collapse of their franchise.

Adelaide Now
July 23, 2012

With 15 of its 21 Australian stores in Adelaide, Billy Baxter's future is in limbo

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Regulars Annamaria Quaresima and Penny Filippou enjoy their coffee served by Jade Riley at Billy Baxter's in the Myer Centre. Picture: Mark Brake Source: AdelaideNow

THE future of the Billy Baxter's restaurant brand is in limbo after the Federal Court yesterday placed the franchisor into provisional liquidation.

The provisional liquidation came about over fears the franchisor was stripping assets to avoid a $1.3 million judgment.

That judgment was in favour of Glenelg couple Ross and Sue Pollard, who won a six-year legal battle to recover money owed over the collapse of their franchise.

All 21 stores across the country - including 15 in Adelaide - are in the hands of individual operators that pay fees to the franchisor company to use the brand and for shared marketing.

They may have to "debadge" to operate as individual cafes.

But that franchisor company - owned and run by Gary Diamond's Paradise Retail Holdings, which also owns and runs the Pet's Paradise chain and Warner Bros' Australian retail operations - was yesterday placed into provisional liquidation over an unpaid debt of $1.3 million from an April court judgment.

Federal Court Registrar Patricia Christie said there was enough evidence to show the company was transferring assets in the weeks after it became liable for the debt - transfers likely to raise doubts over whether the Pollards could recover the amounts owed for the collapse of their franchise.

Mr Pollard yesterday said the legal fight had cost the couple their superannuation and "hundreds of thousands of dollars" of additional costs.

"We decided to take the fight up to them," he said. "But it has taken six years - they just stretched it out."

Mr and Mrs Pollard were told they could expect revenue of $1.3 million in the first year of their Glenelg franchise, but when the business collapsed, the Victorian Court of Appeal found they were given an estimated income with little to support it.

It found Billy Baxter's (Franchising) responsible, but neither self-described "industry leader" Gary Diamond nor Paradise Retail Holdings legal counsel Omar El-Hissi would answer questions yesterday.

John Sheahan and Ian Lock of Sheahan Lock Partners will review the long-term viability, but it is uncertain whether cafes will continue in their present form or will "debadge" as local cafes.

University of Adelaide psychology PhD student Annamaria Quaresima, 27, said she would remain a regular at the themed cafe in the Myer Centre.

"If the problem relates to a specific company, then it's nothing to do with this one," she said.

http://www.adelaidenow.com.au/billy-baxters-cafes-in-liquidation-over-fears-directors-were-stripping-company-of-assets/story-e6frea6u-1226432911717?from=public_rss


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