Despite the country’s two Hard Rock Cafe restaurants reportedly collapsing with a debt of more than $4 million, the Australian franchise’s new owner, Jeffrey Beaumont remains positive.
The Hard Rock Cafes in both Sydney and Surfers Paradise were placed in voluntary receivership back in June, and accountancy firm Cor Cordis was brought in to investigate.
It uncovered more than 100 employees were owed $1 million in entitlements, predominantly superannuation, reports The Sydney Morning Herald.
Earlier this month, The Australian Financial Review said Beaumont was “a Hard Rock franchisee,” and Mark Hutchins, a partner at Cor Cordis, confirmed he had indeed purchased the franchise.
Hutchins said Beaumont had agreed to take on the staff debt, however 100 of the 200 creditors affected by the collapse are unlikely to receive what they are owed.
“Trying to sell a retail business in this climate is virtually impossible, so this is a positive result for employees, many of whom also kept their jobs,” Hutchins said.
“There was too much debt. Unfortunately, a whole litany of creditors have been torched in the process.”
Sydney’s first Hard Rock Cafe in Darlinghurst was a favourite among A-listers and proved immensely successful, however it closed in 2007.
In 2011 Franchising reported the brand was purchased by American Indian Tribe, Seminole in 2006, who closed and moved a number of sites in different countries.
This saw Lennie Huntly and David Rich purchase the brand’s franchise rights in Australia, and they opened a new 500-seater Hard Rock Cafe in Sydney’s Darling Harbour in 2011.
At the time Huntly told Franchising that through their company Goddings, the master franchisor of Hard Rock Australia, they had the rights, and planned to, open restaurants in Sydney, Melbourne, Cairns and Perth.
According to the Sydney Morning Herald, Rich was declared bankrupt last November, and documents lodged with the Australian Securities and Investments Commission (ASIC) point to Huntly’s many debts.
His companies, Hard Rock Cafe Sydney Pty Ltd and Goddings Pty Ltd, owe the Tax Office more than $453,000, and $1 million is also owed to the franchisor, Hard Rock Cafe International.
Beaumont is confident he can turn the struggling restaurants around, and is eyeing a new site at Sydney’s Bondi Beach.
“What happened before was very unfortunate, but I’m trying to make the best of a bad situation. There have been so many costs to bring the business back up to speed, but we’re getting there,” he said.
“Three parties bid for this business. Thankfully, we were successful because we are honouring both the staff and their entitlements. From this day forward, it’s about keeping the heart and soul of the brand ticking forward.”
The brand’s international franchisor has vowed to continue to support its two franchises in Australia.
“At this time, the two locations are working through an administration plan with the previous franchisee, but Hard Rock remains committed to the existing cafe locations in Australia,” a spokeswoman for Hard Rock International said.