Voluntary Administration process

This may be timely advice for some franchisors and franchisees in Australia. From the Asia-Pacific Centre for Franchising Excellence comes a informative blog outlining the processes of Voluntary Administration.

Richard Hughes, partner at Deloitte, describes:

• The voluntary administration process
• Why companies use voluntary administration
• The difference between voluntary administration and a receivership
• What happens at the start of the voluntary administration process
• The aim of the voluntary administration process
• The effect on stakeholders during the voluntary administration process
• Possible outcomes of voluntary administration

While there have been a number of franchise systems placed in Voluntary Administration in Australia, most troubled franchisees tend to bypass the process.

There are aspects of the negotiations involved in some Voluntary Administrations that have come in for considerable criticism suggesting that at times such processes are abused to achieve ulterior outcomes.