Breakaway Angus & Robertson franchisees reach truce with REDgroup administrator

A ceasefire has been declared between the administrators of collapsed bookstore retailer REDgroup Retail and 25 Angus & Robertson franchisees who tried to go independent after the book chain collapsed.

Administrators Ferrier Hodgson were tight lipped this morning on the agreement, declining to comment on whether they had succeeded in having the breakaway group pay franchise fees during the period they had declared their independence.

Spokesman Michael Cave said the agreement was reached after mediation talks, but would not comment on what Ferrier Hodgson had offered in return for the breakaway group returning to the fold, citing confidentiality.

Marie Fitzpatrick, spokesperson for the breakaway group, described the result as a good one this morning, but said “step by step” negotiations with the administrator would continue.

“We have withdrawn our right to terminate [the franchise agreement], and they have stepped away from legal action,” Fitzpatrick told SmartCompany.

Fitzpatrick says the group still wants to trade as independent bookstores.

Talks on whether the group is obligated to pay franchise fees from the dispute period have not been settled, she adds.

Ferrier Hodgson launched legal action against the breakaway group earlier this month, saying it did not have the right to terminate its franchise agreement.

But the franchisees argued they were no longer receiving the benefits of the franchise agreements. They also argued that by not fully honouring gift cards, the administrators had hurt their individual stores.

In a statement this morning, Ferrier Hodgson said: “The voluntary administrators of Angus & Robertson and the Angus & Robertson franchisees who have been engaged in litigation about whether their franchise agreements have been terminated have agreed to put aside their differences and to work together in a process to seek a successful outcome for REDgroup companies which are currently in voluntary administration.”

“The franchisees have withdrawn the termination notices and Angus & Robertson has agreed to discontinue the proceedings in the Supreme Court of NSW, and to preserve the franchise agreements to allow discussions between stakeholders to continue in good faith.”