I have some news for you and the other franchisees... Since the enormous failure of our franchise, establishing a new store in the Sunshine Plaza - Maroochydore whereby for every month of operation we propped up that business by the tune of $7,000 to sometimes $12,000 a month from another our businesses which todate, including legal costs, is approx. $150,000+. This horrendous financial drain and severe loss has now cascaded to where we now stand - just several days from placing our group of companies into voluntary administration. We've been told that there will be zero assets left for us and there is a possible outcome for bankruptcy.
I hope that other Franchisees do not wait and try and trade things out to possibly face the same tragic outcome as us. As soon as they realise that their business is not producing a viable and profitable outcome for their investment dollars and their time, they should move immediately to close the doors and try to salvage what they can. We mad the terrible mistake of trying to trade things out in the 'hope' that things would improve, but in hindsight we should have closed the doors and cut our losses at 6 months from opening. Had we have done so, we might not be meeting with KordaMentha next week. My wife has cried for two weeks since the realisation of our pending financial disaster.
It is a little like the stock market - when you buy a stock and you get all emotional over it, then the price drops and you feel the punch in the stomach, but you say in hope, "it will turn around, it'll turn around", but it doesn't and it slides down in value, but you think... "I'll buy some more", but it slides in price again until one day you truly really realise that the stock is a dog and that it must be put down to cut further losses. It is too late for us now and if we can help advise any other franchisee, we would be happy to listen to their story and offer whatever suggestions that may be beneficial to them.
The other week I visited the Noosa store to have a chat with Maureen the previous owner, but to my surprise the young sales assistant told me that she didn't have the store anymore and that it was bought by Baskin Robbins. So that is now two 'new' stores that they have bought back. I don't know anything about her arrangement and I can not discuss ours. I do know she was loosing much more than we were so in addition to our store, their owners are probably operating at a negative monthly cashflow of approx. $20k - $25k. How long can any business sustain that and who would want to buy a business like that?
I have spoken with a few other franchisees and they are too in a grave financial position... Please keep me in the loop.
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