Embattled national pizza franchise Eagle Boys is reportedly in debt for $30m dollars.
But while the franchisor business is in administration, and has seen the closure of 13 company-owned stores, Eagle Boys franchisees are continuing to operate their independently-owned businesses.
The administrator, SV Partners, has indicated there is buyer interest in the chain.
The first creditors’ meeting was held on Tuesday 26 July.
SmartCompany reports that NBC Capital, the private equity firm behind Eagle Boys, is the largest unsecured creditor.
NBC also owns the Degani brand, and both Eagle Boys and Degani are represented in the Fusion Food Group, which is reportedly owed $7m.
According to Fairfax media, the consolidated group has seen revenue in decline since 2012 – down from $25.2m in 2012 to $17.4m two years ago.
EBA Pizza Holdings and Eagle Boys director Bruce Scott attributed the falling revenue to the changes in market demand and competition.
So what has happened to Eagle Boys’ pizzas?
The pizza wars
Roy Morgan Research has just reviewed the performance of the major players in the pizza market.
The research firm has discovered that Domino’s has increased its customer base from 1.8m in 2012 to 2.3m customers this year.
Competitors Pizza Hut and Eagle Boys have both suffered what Roy Morgan Research has described as the ‘Domino’s effect’, and appear to be the losers in the so-called pizza wars which have focused on dishing up $5 pizzas.
In the past four years visits to Eagle Boys’ outlets plummeted from 852,000 to 336,000 customers on an average four week cycle. That’s a massive 61 percent drop.
Pizza Hut also lost custom but showed a more modest 25 percent fall.
In comparison the Retail Food Group-owned premium brand Crust Gourmet Pizza saw its 400,000 visits overtake Eagle Boys.
The research also reveals a lack of brand loyalty among Eagle Boys’ customers: their tastes for takeaway extended beyond pizza to include KFC, Red Rooster and Subway.
Perhaps more notable is the third of Eagle Boys’ customers who choose to also eat at major rival Domino’s.
Angela Smith, group account director, Roy Morgan Research, says “Domino’s strength lies in its clever use of technology at all stages of the ordering, delivery, pick-up and purchasing process: whether it's allowing customer to place an SMS order using an emoji, providing an app to track a delivery driver's progress or offering a tech-enabled 'fresh fast bake' certification."
Smith says it is “no surprise” that Australian consumers are increasingly taking advantage of this.
“Eagle Boys has been slow on the technological uptake, yet doesn’t stand out with its menu either.
“Over the last few years, increasing numbers of its customers have been eating at rival fast-food (and specifically pizza-focused) chains, making its current situation almost to be expected.
“It will certainly be interesting to see how this pans out and how different the Australian pizza market looks this time next year.”
IbisWorld’s most recent analysis of Australia's pizza market (June 2015) reveals a $3.6bn industry with annual growth of three percent – predicted at 2.1 percent for next four years.