Carl’s Jr’s Australian licensee collapses into administration
Carl’s Jr’s Aussie master franchisee CJ’s Group has placed its 24 restaurants in administration and appointed KPMG Australia’s David Hardy, George Georges and Emily Seeckts as voluntary administrators.
After an initial assessment, the administrators will continue to trade four of the restaurants owned and operated by CJ’s Group.
The voluntary administration does not include a further 25 restaurants which the CJ’s Group has sub-franchised. These 25 restaurants will transition to a direct licensing agreement with Carl’s Jr parent company CKE Restaurant Holdings, Inc.
The administration does not affect the burger brand’s franchisor, Carl’s Jr Restaurants LLC, a subsidiary of CKE.
KPMG Australia’s Restructuring Services Partner David Hardy said the administrator’s initial focus will be on stabilising operations.
“We will be conducting an immediate sale process of the existing store network and operations,” Hardy said in a statement. “We will be working with all stakeholders, including employees, suppliers and landlords, to maximise the outcome for all parties.”
The challenging economy and lack of funding have contributed to the business’ collapse, according to a spokesperson for KPMG.
“Economic conditions resulted in some underperformance in the group and there was an inability to find funding for the group’s pipeline to achieve scalability in the Australian market,” the spokesperson told Franchise Executives.
The initial response to the news on social media channels such as Reddit included some praise for the burger offer but mostly questioned the cost and quality of the burgers, service and choice of locations.
The US brand launched here in 2016 choosing a Central Coast location to kickstart its growth. It had big plans to open 300 stores.
By 2021 there were nearly 30 stores across Victoria, Queensland, South Australia and NSW under separate franchise agreements with four separate businesses, and CKE signed a new national master franchise agreement.
A creditors meeting is scheduled for August 7.
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