Angus & Robertson franchisees should consider buying stricken brand: Experts

Franchisees of the stricken Angus & Robertson chain should consider launching their own bid for the brand, as administrators for the business hunt desperately for a buyer before they are forced to close it down, experts say.

Rival book chains Collins and Dymocks have both expressed interest in buying some stores from the debt-laden REDGroup Retail, which owns company-owned Borders and Angus & Robertson stores plus the A&R franchise network.

The group of 25 breakaway A&R franchisees are yet to comment, although franchise experts say this is a prime opportunity to launch a buyout bid if they want to continue to operate under the A&R brand and grab control of the chain’s future.

“Here’s an opportunity to band together and make an offer for the A&R trademarks,” Norton Rose partner Stephen Giles says, adding buying the entire company might be too difficult for one buyer to digest.

“In my experience, they would be better off with the brand and working the brand that they know and therefore working with any owner as opposed to going it alone.”

Franchise Advisory Centre director Jason Gehrke agrees.

“It would be a logical next step for the franchisees to consider a buyout,” Gehrke says.

“Let’s face it, they have the most to lose and consequently the most to gain.”

He says franchisees would need somebody from within the existing group of franchisees to put a deal together.

He says that in future instances where franchisees are caught up in the collapse of a business he would like to see a significantly more co-ordinated effort from administrators to engage franchisees.

But Gehrke says that franchisees might actually do well if a trade buyer comes through, assuming the cultures meld well.

Gehrke says it is unlikely that the sales of the franchise network would prompt a resetting of franchise agreements because most agreements are linked to lease agreements, rather than an ownership agreement.

Hall & Wilcox senior associate Kristie Pinuita says if stores have good relationships with their landlords and suppliers, franchisees might choose to operate as independent stores as they had earlier signalled.

But Pinuita questions what will happen to the dozens of stores which did not seek to break away from A&R months ago.