Red Rooster stores close after operator collapse

By Nick Hall | 16 Oct 2019 View comments

Seven Red Rooster stores in Queensland have been forced to shut up shop after the operator collapsed into voluntary administration.

Workers and locals were stunned when they arrived on Wednesday morning, only to find that Sunstate Foods Pty Ltd, which owns the Sunshine Coast restaurants had closed the doors.

According to a pre-recorded phone message, Sunstate Foods confirmed that is was no longer operating as a business, opting to direct all enquiries to administrators, Robson Cotter Insolvency Group.

Future for the Red Rooster stores

It’s a major blow to the franchised chain’s network, with Sunstate’s Red Rooster stores representing a strong presence in the region. Restaurants at Maroocydore, Buderim, Currimundi, Noosa, Moreton Bay and Deception Bay are all housed under the operator’s banner.

The closure of Sunstate’s Red Rooster stores is also likely to impact the local economy, with more than 100 staff now out of work.

Clint Ault, Red Rooster CEO said the primary focus moving forward was ensuring that the effected Red Rooster stores reopened quickly, providing impacted workers with a stable working environment.

“These closures have immediately impacted over 100 employees, landlords and suppliers. As soon as we were notified of the closures we commenced working with the administrator and landlords with the aim of re-opening these stores,” Ault told Inside Franchise Business.

“Our intention is that there will be no job losses – our key focus right now is to re-open and secure the ongoing employment of affected employees as quickly as possible.”

Ault also confirmed that none of the remaining 360 Red Rooster stores would be effected by the Sunstate voluntary administration announcement, reiterating that this was an isolated situation that was not reflective of the network as a whole.

“For a business that supports 190 individual business owners operating 360 restaurants with 9,500 employees, this is an isolated situation that is not reflective of the incredible work our franchise partners in our network are doing every day, 365 days a year,” he said.

Recovery plan

Facilitating the recovery is administrator Roland Robson, who revealed that a strong external interest was bolstering positivity.

“We are moving rapidly to try and get a resolution and have these stores operational,” Robson told Inside Franchise Business.

“Under the proposed recovery plan that we have in place, the goal is certainly to have the stores operational by the end of the week, which would be a fantastic result. There’s been a lot of people involved in that process so far.”

Robson also said that the sharp response was typical of the close-knit local community, agreeing that job security was the ultimate priority.

“It is 100 jobs, and I suspect a large portion of those would be casual, but that casual workforce is paying for university, tertiary education or high school and they rely on that money. Not to mention that full-timers who may have a mortgage to pay for,” he said.

“The Sunshine Coast is a small community, despite covering a large geographical expanse and it’s had its ups and downs with construction. So, when a large chain like this goes into financial demise, it makes it all the more important to find a meaningful resolution.”