Matchbox 20:
Donut King Westfield Parramatta for sale.
Established 2 years.Takings 7400 +gst.
Asking $95k.
There goes $200k in 2 years.
Putting the two above posts together, a lender will surmise the balance sheet item ‘creditors – unpaid profit – amounts owing to franchisees’ is over-stated. Not unlike a property investor (franchisee) with negative equity with the bank (RFG) choosing not to settle. If this is a significant number, upon review by the bank, lending covenants may have been breached.
Consider DK Parammatta owing $100k to RFG and asking $95k. Bottom line : if sales and profits for franchisees are disappointing and expected to deteriorate then bankers must realize RFG’s business model is broke.
The straw on the camel back will be negative publicity and bankers wise-ing up and getting cold feet. As with Dick Smith Holdings, the discredited management cried that banks prematurely rush in to call back the loans. Tony A will be entertaining bankers; low-calorie caviar and champagne
RFG Price at posting:
$2.85 Sentiment: None Disclosure: Not Held
(20min delay)