In March administrator KPMG agreed to surrender the head leases of stores that failed to meet its blanket £10,000 valuation, leaving franchisees free to discuss new terms directly with landlords. But KPMG is still in talks with franchisees about remaining debts and contracts.
Spokeswoman Rachael Halliday told OLN: “There are a small number of matters remaining with franchisees and their representatives, such as outstanding debt and franchise termination agreements and leases.
“As well as that, negotiations with eight remaining franchisees yet to complete an assignment of the head lease are ongoing, but we expect this to be concluded shortly.”?Geoffrey Sturgess, solicitor for Blake Lapthorn, the law firm representing 45 Threshers franchisees, said the process had taken far longer than expected.
“In my view it has taken two months longer than it should have. It became apparent to KPMG in January there was no money for them, apart from five franchisees who were going to buy their leases.
“As a result, it became a pretty low priority for the administrator, but it’s obviously a high priority for stressed-out franchisees who are still waiting.”?Franchisees have voiced their dismay over the delays and complained of escalating legal costs while the process continues following FQR’s collapse on October 29, 2009.
Sturgess said the franchisees he was representing had each paid £1,620, plus a £100 property valuation fee.
Meanwhile, KPMG’s own time sheet showed its administration fees had hit £3.5 million after two months. Halliday declined to comment on the current figure.
Christie & Co was initially instructed to sell around 1,200 outlets and over the past six months a handful of entrepreneurs have snapped up stores in prime positions.
Any future sales are likely to be to smaller operators. Oddbins managing director Simon Baile said that despite his initial interest in acquiring some of the shops he had not taken any on.
He added: “We didn’t think the sites were anywhere close to the quality of sites we have and really want to ensure we get very good sites in the future. Simple as that.”?Mike Solomons, corporate recovery and business reconstruction partner at insolvency firm Kingston Smith, said the economic climate made the market extremely challenging.
“You’d be unlikely to get any value out of the leases now as those with any value would have already been bought,” he said.
Another tranche of stores has been taken on by M&O Trading, an off-licence chain based in Burgess Hill in West Sussex.
It has taken on the leases of 25 ex-First Quench stores, which will take the number of its shops to 40.
Ben Taylor, area manager of the new stores, said the company was also considering expanding beyond its Sussex heartland into Kent and Surrey with more acquisitions in the future.
He said: “Five new shops have opened in Brighton, Findon and Lewes. The shops are mostly old First Quench stores and are all in a great position, so it would be silly not to take advantage of them becoming available.
“We’ve had some delays as the administrators surrendered some of the licences so we had to reapply. Fortunately we had no problems but it held things up a bit,” he said.
The new shops will open under two different fascias.
“If they are in a beer-drinking community they will be called The Offie but if they’re in a nicer area they will be called Hartleys and will have more of a focus on wine. I want the majority to be Hartleys.”?M&O Trading also owns Mulberry’s and Easy Hours convenience fascias.