“Left with no choice” – Max Brenner closes 20 outlets

Embattled chocolate and café chain Max Brenner has shut 20 of its 37 Australian outlets after entering voluntary administration last week.

Administrators McGrathNicol confirmed on Friday evening that more than half of the stores operated by the Australian arm of the international brand would shut on October 8.

“The decision to close stores is always regrettable but in this case, we were left with no choice following a store-by-store review of Max Brenner operations,” administrator Barry Kogan said in a statement.

The initial administration announcement had raised concerns for the network’s over 600 staff nationwide, with those fears now realised.

McGrathNicol had previously indicated that it would be “business as usual” for all stores while the review was underway, however the latest announcement sees all staff working at the 20 locations made redundant.

Of the surviving 17 outlets, nine stores will remain open in NSW, four in Victoria, three in Queensland and one in the ACT.

The company is pulling out of Western Australia, South Australia and the Northern Territory entirely.

Max Brenner Australia, which operates as a franchise licence holder of its Israeli parent company cited “escalating costs and tighter retail trade” as the reasons for entering voluntary administration earlier in the week.

As the local store closure continues, parent company Max Brenner International Inc. says it is currently searching for a new franchisee to keep the brand alive in Australia.

McGrathNicol confirmed this, announcing it hopes to secure the future of the remaining Australian stores through a deed of company arrangement, or by selling it to new owners.

“Based on the strong interest we have received to date we expect a high volume of inquiries,” Kogan said.

A first meeting of Max Brenner creditors will be held on October 11.

Author: Nick Hall

This story originally appeared on sister-site Inside Franchise Business. 

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Comments

2 comments

  1. Gary Mathew posted on October 8, 2018

    A Thought? I am wondering who did the Business Strategy for Australia. They broke so many simple rules. 1. Concentrate one market until you have the system functioning profitably, and with solid growth and all systems functioning like clockwork. 2. You then go to a second market and duplicate. Landlords obviously talked them into sites across the breadth of Australia. So many companies have failed following this strategy. 3. Not negotiating strongly enough with rental rates and locations. There are many other errors but leave at that. I hope the new franchise has local Retail knowledge and uses the experience of others before launching headlong into the business. Talk, collaborate, talk, collaborate.

  2. Don Gilbert posted on October 8, 2018

    Why did they NOT negotiate the terms of their leases properly?

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