US burger chain to close 20 Aussie stores in collapse

A beloved US burger franchise which had big plans to expand into Australia has entered voluntary administration.

Late yesterday, KPMG's David Hardy, George Georges and Emily Seeckts were appointed administrators of CJ's Group, which is the master licensee for Carl's Jr in Australia.

The burger chain, which opened its first store in Australia in 2016, operates in dozens of countries around the world.

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Carl's Jr. burger bun

In Australia, CJ's Group independently owns and operates 24 Carl's Jr restaurants, KPMG said in a statement.

The group also serves as the master licensee to 25 Carl's Jr restaurants independently owned and operated by third-party sub-licensees.

Those 25 are likely to remain largely unaffected by the new development, KPMG said.

They will be transitioned to a direct licensed relationship with CKE Restaurants Holdings, Inc, which owns Carl's Jr Restaurants.

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Heidi Klum for Carl's Jr

The chain's global outlets remain unaffected.

Of the 24 outlets operated by CJ's Group, 20 will be closed immediately, while four will continue trading as usual.

"As voluntary administrators, our initial focus will be on stabilising the operations of CJ's Group," KPMG Australia's restructuring services partner David Hardy said.

"We will be conducting an immediate sale process of the existing store network and operations. We will be working with all stakeholders, including employees, suppliers and landlords, to maximise the outcome for all parties."

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All suppliers, customers, landlords and other key stakeholders are expected to be contacted in the coming days.

A meeting of creditors is scheduled for 7 August 2024.

CJ Group's website offers a stated goal of more than 200 Carl's Jr outlets around Australia in the next decade, directly employing more than 10,000 people.

The website as of this morning also stated franchise opportunities were available in Victoria, New South Wales, Western Australia, and Queensland.

The group's entrance into voluntary administration comes as the Australian hospitality industry faces increasing pressure from the cost of living crisis.

Credit watching bureau CreditorWatch recently predicted one in 11 (9.1 per cent) hospitality businesses would fail in the next 12 months, well above the average predicted business failure rate of 5.1 per cent.

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