ABQ Still Overvalued as Brands Collapse

Allied Brands Ltd. (ABQ) shareholders should take note at the continued dilution in their shareholdings.  In the next few weeks, another almost 5.5 MILLION shares will be unfrozen from trading. 

With another million more coming out of escrow shortly.

With retail trading down massively across the board, these brands (Baskin Robbins, Cookieman, Kenny's Cardiology gift shops) it is clear that this company looks to be in more trouble than most.

Allied paid:

$7.1 MM           Awesome Water

$5.8 MM           Kenny's Cardiology

$5.83 MM         Cookieman

$18.73 MM       TOTAL PURCHASE PRICE

Current Market Valuation   $18.0MM

Curiously this doesn't include the largest and most reputable international brands, Baskin Robbins Ice Creamery.  Clearly the market understands that these brands are slowing deteriorating under the failed management at Allied Brands, just as the Baskin Robbins shops continue to fail.

With another 5% of shares now being released for trading (and let's face it, the people paid with these shares wouldn't seem to be likely to sit on them in the face of the facts that they are aware), Allied Brands (ABQ) looks to be headed to single-digits before too long.

Baskin Robbins Franchises Lodge ACCC Complaint for Unconscionable Conduct

We've received several reports from Baskin Robbins franchisees that their wholesale ice cream price paid to Allied Brands Ltd. is now "floating" with changes in the US$-AU$ exchange rate.

A prominent franchisee solicitor firm at Surfers has been hired to fight on behalf of a large (majority) group of franchisees.  

It is alleged in the complaint filed with ACCC that Allied Brands Ltd. has engaged in unconscionable conduct in this action, violation of ACCC laws on trade line forcing, and false disclosure to the franchisees.

Who in their right mind would sign an agreement for a franchise if the franchisor told them their price for their ice cream can change WEEKLY???

Have you ever seen McDonalds, Wendy's, or any other QSR franchise adjusting their pricing WEEKLY?  It's crazy!

And as one franchisee has pointed out, Allied Brands Ltd. (ABQ) made a promise to their shareholders in the original prospectus that the pricing on ice cream and other imported goods would be "currency hedged" - this means that the pricing stays the same no matter the rise and fall in the currency exchange.  Kinda like buying insurance.

Seems like ABQ hasn't done this, not just screwing their franchisees but also screwing their shareholders.  Shareholders obviously lose big when their businesses are forced to RAISE retail pricing in a deflationary environment - brands like Wendy's are lowering prices to expand market share.  Baskin Robbins Australia shops, forced to RAISE pricing because of Allied Brands incompetence, are LOSING market share.

Could be why Allied Brands Ltd. (ABQ) stock is now sitting at .18 a share, a massive collapse and far greater than other companies in this same business in Australia.  It isn't the sharemarket, it's Allied Brands!