O'Brien's franchisees reject Sweeney rescue

A NUMBER of O’Brien’s sandwich bar franchisees have written to the group’s examiner warning that they will not support any rescue plan for the troubled chain while it remains under its current management.

The letters were delivered yesterday – the final deadline for bids from anyone interested in investing in the business. It is understood that one of the proposals received is from a number of franchisees based in the south of the country.

O’Brien’s Irish Sandwich Bars Ltd won High Court protection from its creditors last month, when Paul McCann of Grant Thornton was appointed examiner to the business, giving him up to 100 days to find a rescue plan.

At the court hearing it emerged that there were a number of investors interested in the company.

Yesterday, an organisation of franchisees, which says it represents a majority of the 85 outlets in the Republic, wrote to Mr McCann saying they are not prepared to support any rescue plan under current management, led by founder and owner, Brody Sweeney.

The letters stated that the franchisees are in dispute over their contract with O’Brien’s Irish Sandwich Bars Ltd. They added that the franchisees intended to “withhold future/ongoing management service fees and all accounts due to O’Brien’s” and set them off against monies they believe are due to them from the company.

It is understood Mr McCann received final bids from potential investors yesterday. He is likely to put these to the banks shortly.

The bid from the company’s own franchisees is said to include a proposal to reduce royalties – the fees paid for use of the brand and the company’s main source of income – and give all franchisees the option of exiting when their agreements are up. Mr Sweeney told The Irish Times last night that he heard of the correspondence with surprise and regret. “As of today a majority of our franchisees continue to support the brand and the management, notwithstanding that many of them are worried about their futures,” he said. He added that along with most retail businesses, O’Brien’s is finding that trading conditions are extremely difficult.

“Some franchisees are experiencing real difficult trading conditions,” he said. He stressed that the management had been working hard with Mr McCann to ensure the smooth running of the business during the examinership.

He added that plans for restructuring would be announced shortly, and said the group is confident for both the future of the brand and for its franchisees.

Mr Sweeney founded the company in 1992. It has a presence in 16 countries.