Allied Brand’s losing battle

It’s not hard to feel just a little sorry for Allied Brands chief executive Sean Corbin, who this morning was given the horrible task of putting his company into administration.

Corbin, who joined Allied Brands in September 2009, took over the CEO’s job just a few months ago, when former chief Shane Radbone was sacked.

The die was cast long before Corbin arrived, but he has had to fight to try and restructure and recapitalise a company clearly on its last legs.

This morning, Corbin expressed frustration at the decision of Baskin-Robbins’ brand owner Dunkin’ Brands to terminate Allied Brands’ master franchise agreement last week.

Corbin he says he had a fresh strategy and fresh capital all ready to go, but the termination scared his investors away.

He also described the franchise chains that Allied managed as solid brands that just need to be turned around.

“The brands that we were looking to hold on to were strong, given good management.”

It’s that last bit that is important – “given good management”.

Unfortunately, Allied has not had this for some time.

In recent weeks, SmartCompany has uncovered a litany of problems with the way Allied has been run for the last few years.

For starters, putting together a disparate group of franchise chains – ice-cream, cafes, cookies, water, plasma screens, cards and gifts – was, in hindsight, a terrible idea. There are just not enough synergies between the businesses to drive the type of economies of scale that make franchise brand managers work.

Secondly, management got sidetracked with some ugly franchise recruitment strategy, including an immigration rort that saw Koreans bought into Australia on 457 visas and then given franchises to run.

Thirdly, Radbone’s sacking suggests internal management problems were an unwelcome distraction. When you are trying to right a sinking ship, this is really the last thing you need.

We’ll be exploring the lessons from the Allied collapse in much more detail in the coming days, but the lesson for entrepreneurs is clear – management must be focused at all times, particularly in a company as complex as Allied Brands.