O’BRIENS IRISH Sandwich Bars will be taken out of liquidation by a subsidiary of the Abrakebabra restaurant group under a deal arranged yesterday.
Impless Limited, a newly formed company, will become the master franchise-holder for O’Briens sandwich bars in the Republic and will continue to trade under the O’Briens brand.
Under an arrangement sanctioned by the High Court, Impless will immediately take over franchise income from O’Briens, while it will take 90 days to conclude other aspects of the deal.
This is thought to refer to finalising arrangements with individual franchisees, a matter that has caused considerable upheaval for those involved with the company over the past few months.
Impless, backed by Graeme Beere, who holds the Abrakebabra, Gourmet Burger and Bagel Factory franchises, and concert promoter Denis Desmond, was on the point of taking over O’Briens earlier this month but the deal fell through at a late stage because of issues surrounding franchisees’ leases. This led to the firm, which was placed in examinership in July, being liquidated.
Yesterday’s deal was concluded by liquidator Paul McCann of Grant Thornton. No price was disclosed.
Mr McCann said he was “pleased that such an important Irish brand will be taken forward by such a quality organisation”.
A release issued by the buyers quoted two Cork-based franchisees, Don Cahalane and Collette Moyles, as being “delighted”.
It is believed, however, that a group of franchisees, thought to number at least 20, are opposed to the arrangement and are considering legal action in at attempt to block it.
Neither Mr Beere nor Mr Desmond commented directly yesterday. In their press statement, they said they were “looking forward” to working with the franchisees to ensure that they feel “renewed confidence” in the O’Briens brand.
The Commercial Court heard yesterday that Mr McCann had received three bids for the business by October 8th, with the highest coming from Impless.
Mr Justice Brian McGovern was told that the only way Mr McCann would be able to sell the business as a going concern would be if he could sell the right to collect payments from franchisees.
There are 85 O’Briens outlets in the Republic, with the chain having been built up by entrepreneur Brody Sweeney. Mr Sweeney did not respond to calls yesterday.
Under its business model, the company leased many of the outlets from which its franchisees operated, subletting the properties to them. The slowing economy led to some restaurants closing, however, leading to cashflow problems for the group as a whole.
Mr Beere and Mr Desmond’s initial attempt to buy the company was based on the company no longer being involved in leases on properties occupied by its franchisees, but this structure was not permitted by the High Court because existing arrangements could not be repudiated on a wholesale basis.
The new deal does not include the O’Briens businesses in the North or in Britain, which are in administration.
