Kleenmaid Franchisor Collapses with $67 Million Debt

Posted Sat, 2009/04/11 - 19:30 by Deanne de Leeuw

MAROOCHYDORE, Australia - The Kleenmaid Kitchen and Laundry Company has gone into administration, owing $67 million dollars. 150 staff have lost their jobs, with Kleenmaid's 20 stores nationwide, including their 15 franchises, closing their doors.

As franchisees are considered unsecured creditors, they will likely receive nothing for their franchise investment.

The company was still selling franchises despite a former employee saying that "some staff had feared for the future of their jobs for at least a year" when the company started having "trouble filling orders and not being able to supply stock".

One Sydney franchisee told radio 2GB that he bought a Kleenmaid franchise in November last year and is now "probably down $270,000 plus expenses."

Read the full story at The Australian

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13 Comments

The company was still selling by davidvilla

Submitted by davidvilla on Sat, 2009/10/24 - 01:39.

And we thought they could not bury it by Ray Borradale

Submitted by Ray Borradale on Sat, 2009/10/24 - 02:22.

Of course the ACCC could bury their opportunity to intervene in what is Australia's greatest home-grown franchise disaster. But the ACCC heiracy had so much warning they could plan ahead.

Bottom line; the ACCC has been asked why not ... and they have answered ... why?

Who is that Masked minister?

The more things change; the more they stay the same.

Re: Kleenmaid Franchisor Collapses with $67 Million Debt by Guest

Submitted by Guest on Fri, 2009/05/22 - 01:34.

i knw of a case where kleenmaid allegedly paid a contractor a very large amount of money the night before they went unde to drive a very large truck full of appliances to another location and than proceeded to offer existing clients their own goods they had already paid for at a very low price. (had to be paid in cash). one person went to the police with the info and fraud cquad and offered to do a deal on camera to catch them out. NOTHING WAS DONE ABOUT IT. the same person went to channel 7 and suprise suprise the same thing happened. allegedly kleenmaid are back in business under a different name. the name starts with lifestyle.

Don't contact me by Ray Borradale

Submitted by Ray Borradale on Fri, 2009/05/22 - 02:34.

if you are full of it. And you sound like you are full of it. Otherwise I am not that hard to contact - just register for a minute and send me a BMM message ... or you could do a little tracking for 10 minutes ... as I tell everyone I meet/I'm easy. But you would need to be able to support what you say ... that's the hard part.

The more things change; the more they stay the same.

I had a couple of glasses of wine by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2009/05/22 - 02:50.

I am capable of supporting what I say.

Another winer by Ray Borradale

Submitted by Ray Borradale on Fri, 2009/05/22 - 03:10.

I'm outta here Do. Friend called and he won $13,001 [not sure how] and he wants to buy me a Bundy .. my wife said go [not unusual] - should be a quiet nite - not ... Now what can I sell him that would cost him $13k and his home? I'll get creative.

The more things change; the more they stay the same.

Cheap shot Ray by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2009/05/22 - 03:21.

I was only teasing you. It would be wonderful if what you say is true. I admire your blogging in behalf of your country men. (Actually the world when it comes to BMM.) What is a Bundy? Is it a car? Is it Bundy jump? You know the kind thing that you jump off a bridge or something? Or is it called a Budgy?

Re: Cheap shot Ray by Ray Borradale

Submitted by Ray Borradale on Fri, 2009/05/22 - 03:41.

That is what my friends call me ...'cheap shot Ray'.

Bundy is a sophisticated drink for the cultured and for disgruntled franchisees;

"bundy drinkers are a lot louder, and more disruptive than other patrons."

Now I really have to go .. there is a steak involved as well.

The more things change; the more they stay the same.

ACCC by Graeme Brown

Submitted by Graeme Brown on Mon, 2009/04/13 - 00:47.

Memo to Graeme Samuel, how many more systems have to fail,or reports of Franchisee abuse do you need before you act?

RE: ACCC by Samuel, Graham

Submitted by Samuel, Graham on Fri, 2009/05/22 - 03:22.

I'm sorry about all that but I take care of cartells and important stuff. I'm not sure who looks after franchising but I will ask. I think it's ASIC or the ATO or someone with a budget, power and interest. If I was the regulator of franchising I can assure you we would have much better excuses. Warm regards .. GS

Re: ACCC by Ray Borradale

Submitted by Ray Borradale on Mon, 2009/04/13 - 07:29.

I hate to say this but the failure of franchise systems isn’t the fault of the ACCC. How the regulator has or hasn’t performed generally is a different matter but when franchise businesses fail that is usually a consequences of poor zor business acumen, an inevitable product of a rogue system or bad luck and as far as franchisees go, it is a gamble gone wrong and sometimes; due diligence based on required disclosure which is then obviously inadequate and is never verified by the regulator before, during or after a disaster. These franchise failures can be partly attributed to the consequences of poor regulation set down by a federal minister who has no interest. Stricter guidelines on accountability along with transparent annual company reporting similar to what is required by ASIC would help. But this is franchising so what we get is an ‘acceptable’ level of casualties justified against the ‘greater economic good’ which translates to taking the easy way out and pandering to FCA. Generations of new franchises come and go while new federal ministers come and go and plead ignorance while arguing the ‘statistically insignificant’ line. It will now be reported that in the last year there were only and approximately .5% of franchises that have failed. At a guess; only 200 to 300 franchisees are wondering what the bloody hell happened.

The more things change; the more they stay the same.

Australian franchising disclosure by Ray Borradale

Submitted by Ray Borradale on Sat, 2009/04/11 - 21:12.

This is another to the list of recent Australian franchise collapses along with Kleins Jewelry, EzyDVD, Strathfield and Midas Car Care.

What minimal reporting there has been on the outcomes for franchisees offers nothing to suggest any have avoided substantial financial pain.

The Kleins collapse received much sympathetic attention during the recent federal Inquiry into franchising but that was then and as with the others the effects to another franchisee network can be expected to be swept under the carpet. Not only are these franchisees not responsible for the failure of the franchisor; the franchisees typically aren't told there is a problem, and as Deanne writes, while franchisors continue to push the sale of franchises right up until the hand over to an administrator.

Could buyers have anticipated a collapse based on current disclosure requirements? No! What disclosure would effectively give prospects a chance?

Who will be next?

The more things change; the more they stay the same.

Body Workshops by BJ

Submitted by BJ on Sun, 2009/04/12 - 21:55.

Add body workshop fitness centres to the list of collapses.

Kleenmaid Franchisor Collapses with $67 Million Debt

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