Jamie Oliver's company had found a franchisee operator to run its chain of restaurants in Australia before it called in administrators, leaving some workers out of a job and unsure if they will receive unpaid wages.
Jamie Oliver Restaurant Group Australia appointed partners from accounting firm BDO on Monday and closed down its outlet in Canberra with immediate effect.
Jamie Oliver at his Canberra restaurant in 2017.Credit: Katherine Griffiths
The five Jamie’s Italian restaurants in Sydney, Brisbane, Perth, Parramatta and Adelaide will continue to trade under the management of the Brisbane-based Hallmark Group.
All 53 of the global company's restaurants outside the UK are run as franchises, with the Australian arm being owned in-house for a short stint after the collapse of previous Australian franchisee Keyston Group in late 2016.
One employee at the now-closed Jamie's Italian in Canberra said workers were told that as well as losing their jobs, they would not receive their wages for the past fortnight until further notice.
Going into administration means there is no guarantee workers will receive their entitlements at all, or that suppliers will have their invoices paid.
The employee, who asked not to be named, said the restaurant had about 35 casual staff and 13 full-time workers, including some who the company had sponsored on work visas.
A spokeswoman for the Jamie Oliver Restaurant Group said staff who were "transitioning" to the new operators would be paid wages up to that date, but would not comment on the Canberra staff's entitlements.
She said the business "faced high rent and restrictive trading conditions, so made the difficult decision to close the Canberra site”.
“Australia has, and continues to be, one of our best-performing international markets and, after a short period of in-house management, we are pleased to be partnering with Hallmark," she said.
A BDO spokeswoman said voluntary administration was necessary "to facilitate the closure of the Canberra restaurant".
Documents lodged with the Australian Securities and Investments Commission show the restaurant group had been working on plans to exit Australia for several weeks, with its advisors KordaMentha contacting BDO on March 21 to discuss company finances.
The company's directors and KordaMentha met BDO's Andrew Sallway a day later to discuss the efforts to sell the business, and what its insolvency options were if it could not find a buyer, or depending on the structure of the sale.
Hallmark was involved in discussions by April 9, when a meeting was held to discuss a proposed sale and how it could operate the business under a license agreement before a proposed sale.
The company was planning for "day one" of administration on April 10. The Canberra store continued to trade until Monday morning.
Oliver's businesses are facing stress globally, and have been trying to restructure debts of £71.5 million ($126 million).
A spokeswoman for Hallmark said the group was "thrilled to partner with Jamie Oliver Restaurant Group on the Australian portfolio" and was "actively seeking new suitable locations for the next Jamie’s Italian".