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!

VISITOR COUNTER

VISITORS THIS YEAR

HERE'S OUR STORY - AND A WARNING TO BASKIN ROBBINS AUSTRALIA FRANCHISEES

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.

CORRECTION - FAILED STORES OUTNUMBER NEW ONES

Allied Brands sends out news stories telling about their "big expansion" plans.  These news stories are used to push the stock price up.  And then when the reality begins to awaken, the stock price slowly returns to the low price.

Earlier this year they said "big expansion in WA".  In fact Baskin Robbins shops only close, and no new ones open.

Just recently Allied Brands and Baskin Robbins Australia says "nine new stores this year".   How is this good, when ten or more stores close?

Like these:

Henry Dean Plaza  (less than six months, Korean people dudded).

Sydney Penrith  (small ice cream case shoved into Cookieman while Chinese people dudded)

Sydney Rouse Hill (two year shop closed, Indian people dudded)

Hamilton NSW  (one shop failed, lawsuit filed, new store opened, closed in less than a year)

Bondi Jct  (four year shop fails in busy mall, more Indian people dudded)

Rockhampton (two shops fail, more people dudded)

Bondi Beach (opened, failed, reopened with Cookieman, failed, Canada people dudded)

Townsville Willow (part of successful Subway shop, chinese people dudded)

Allied Brands also announced "big interest in Cookieman franchise from many countries in Asia and Middle East ----announcement by end of year".

What year?

Well known Franchisee defenders "Blue Mau Mau" have now taken up the plight of Baskin Robbins franchisees in Australia!

They are also investigating problems at Cookieman as well as Awesome Water.

http://www.bluemaumau.org/

ANOTHER ALMOST WORTHLESS BASKIN ROBBINS IN PERTH

I feel for you. Everything, every quotations and details are very descriptive, and truly true. This Allied Brands doesn't care if we make $1 or $10 a month. Whoever just bought a BR franchise, are truly innocent people who haven't done their research properly about Allied Brands, and just swallowed any of those HO sales pitch religiously. Did you know that when I bought my BR was costing me $220K, now I find it hard just to sell it for $50K plus stocks?  

In overseas countries Baskin Robbins is respected franchise and owners make a descent living from their hard work. Now Allied Brands brings Korean people to Australia by selling them shop AND visa!  These people are now struggling and can't complain to anyone otherwise they get sent back to Korean.

I kept talking about the idea of the so-called Franchisee Association from long time ago, it's THE only way and THE most effective force to bring justice. It's long overdue. But if most of us are so passive like right now, then I think is going to be really hard for that to happen. We find an internal passive resistance as well as external attack from HO.

Peter Graham calls us "Franchise Business Partners".  Peter Graham wants the partners to fail so they can resell our shops to new suckers.  This isn't how partners act to the other.  Partners?   I want a divorce!