CJ’s Group - Case Update

David Hardy, George Georges and Emily Seeckts of KPMG, the administrators of CJ’s Group, have updated creditors on the progress of the administration and the ongoing sales process for the Group’s Carl’s Jr restaurants.

Carl’s Jr is an American fast-food restaurant chain specialising in chargrilled burgers. Docklands, Victoria headquartered CJ’s Group was a licensee of Carl’s Jr restaurants in Australia which owned and operated 24 Carl’s Jr restaurants across Australia. One of the Group companies, CJ’S QSR (Franchise) Group, served as the master licensee to 25 Carl’s Jr restaurants independently owned and operated by third-party sub-licensees.

At the time of appointment, CJ’s Group had approximately 850 staff. The Group has been largely unprofitable since its inception in 2016 due to the increased cost of labour and raw materials which was exacerbated by the COVID-19 pandemic, as well as declining sales due to a pivot in consumer spending patterns away from fast food.

The underperformance of the majority of the store network caused the Group to be reliant on funding from the parent entity for operations. The Group appointed voluntary administrators in late July after the parent refused to provide further funding support.

The administrators assessed the Group’s business and made the difficult decision to cease trading 20 of the restaurants, while four continue to operate. All staff at the closing restaurants were immediately terminated.

The administrators have also been undertaking a sales campaign since their appointment, resulting in 88 expressions of interest and 23 non-binding indicative offers being received at this stage.

As a result, the administrators have proposed that the second meeting for certain of the Group companies be adjourned to allow the sales process to continue.

Read the report HERE.