Red Rooster closures a shock for fellow franchisees

Red Rooster closures a shock for fellow franchisees

The Australian franchise sector was taken aback earlier this month, when seven Red Rooster outlets closed their doors in South-East Queensland.

On 14 October more than 100 employees across the stores on the Sunshine Coast and Moreton Bay were told they no longer had jobs following the demise of the franchisee responsible for operating all seven restaurants.

Sunstate Foods Pty Ltd went into voluntary administration that same day, and the following morning its Red Rooster locations were closed to the public.

Red Rooster’s parent company, Craveable Brands, has vowed to try to re-open the stores.

Over the past 18 months there has been frequent public and media speculation over the sustainability of Red Rooster, which has been trading in Australia for almost 50 years and now operates over 360 franchises.

Industry experts have claimed Red Rooster’s focus on chicken has become a millstone thanks to sharp increases in the price of poultry. While the company has expanded to lamb and fish options, it still does not offer the range of desserts, snacks and beverages available from its fast-food rivals.

This is a nightmare scenario for every franchisee; inflicting tremendous upheaval and stress upon hundreds of staff.

In an increasingly crowded and competitive sector, careful financial oversight is the key to staying viable. A crucial part of doing so is having access to fast, agile finance that can meet the changing needs of your business, whether it be reacting to market conditions, or proactively investing to future-proof.

Enterprise Finance specialises in finding the most appropriate finance and capital solutions for franchisees and their primary suppliers. Contact us today to make sure your business is financially secure.