Franchisees in the retail franchise chain Samsara are continuing to trade and are not in administration, despite administrators being appointed to three of the companies associated with the Queensland business.  

A creditors meeting held 2 June showed debts of $2.2million for the company; approximately $1.3m secured debt; about $800,000 in unsecured debt; and employee entitlements of about $100,000.  

The three companies in voluntary administration are Samsara Wholesaling Pty Ltd, Samsara Furniture and Homewares Pty Ltd and Samsara Licencing Pty Ltd.  

Samsara’s warehouse and only company-owned store are at Burleigh heads.

Franchised stores at Port Macquarie and Collaroy in NSW, Osborne Park in WA, Brisbane, Noosa, Helensvale, Cairns, and Bundall in Queensland, are all separate legal entities.  

However the situation is complicated by the lack of standardization across the network with each franchisee or licensee holding an individual agreement with the franchisor and therefore bound to different entitlements.  

This is a cause for concern for franchisees said administrator Gavin Morton from PKF in Brisbane. “It is unusual. There is a fair bit of inconsistency through this business model.”  

Some franchisees or licensees, for instance, have the right to source stock directly from overseas suppliers while others are bound to purchase goods solely from the franchisor.  

Morton told Franchising magazine his strategy is to deal first with the remaining stock and this has been offered to franchisees.  

However, he said the stock at the warehouse is older. "Franchisees can review and order but what is left is slow moving stock.”  

Morton said other containers ordered are in transit and some franchisees had paid deposits for the goods.  

“It’s in our interest to make sure it arrives and is made available.”  

The next stage will be to look at the intellectual property and try and find a buyer and Morton revealed some franchisees are looking to band together to buy the intellectual property.