HOW STAN GORDON WOULD SAVE EAGLE BOYS
Written on the 22 July 2016 by James Perkins
STAN Gordon has stepped forward as a suitor for embattled pizza chain Eagle Boys.
"Are we the right guys? I think we are," Gordon, the owner of Melbourne-based Franchise Food Company, tells Business News Australia.NBC Capital, which bought the business off founder Tom Potter in 2007, called in receiver SV Partners on Thursday 14 July.
Gordon is the first to step forward as a potential buyer since the administrators arrived. He previously made a bid for the company in November 2015, but it went unanswered.So what would Gordon do if he got his hands on Eagle Boys?
"I would reposition the brand, it is a brand of yesteryear. It is fantastic for what it was, but the world has changed," he says."We need to reassess the product offering. You have the other big players selling pizzas at five dollars and I also have to question that. I don't believe we position it as a mass market product. The quality needs to be repositioned."
Gordon also sees Eagle Boys as a 'small business' and would exit the pizza technology arms race that Domino's (ASX:DMP) is clearly winning.
"Looking at the larger players, such as Domino's, they have created brilliant businesses, and they are businesses run on tech. I would not want to compete in that market. It does need to find a new point of difference and technology is not it."We understand small business and we are passionate about brands. We are not a big corporate. If I have to, I will roll up my sleeves and get my hands dirty."
Gordon also sees Eagle Boys benefiting from the back-office engine room already established at Franchise Food Company, which owns seven brands: Cold Rock, Mr Whippy, Nutshack, Pretzel World, Europa Coffee, Trampoline Gelato and Healthy Habits.
Others, including the Gold Coast-based Retail Food Group (ASX:RFG), and Domino's, have been speculated as potential buyers, but RFG claims it is not interested and Domino's has refused to comment. New Zealand's Restaurant Brands is also in the mix. Private equity firms such asArcher Capital or Yum! Brands, owner of Pizza Hut, are speculated to be in the mix.
Gordon said NBC had been looking for a buyer for the business since at least November 2015. An information memorandum was circulated to potential buyers that Gordon says was 'lacking in financial detail', but he still made a conditional offer for the business."We put our hands up, and said 'yep, we think we can do it'. Their response was 'thank you very much, we will get back to you shortly'." Gordon never heard back.
When asked if his November bid was too low, he replied: "The first bid we put in was stupidly high for what it was worth."As to his current bid: "We will not be paying multiples of next years' potential earnings, which would only be that high with myself in charge anyway."
There are around 120 remaining Eagle Boys franchisees and they will continue operating while SV Partners looks for a buyer.NBC Capital was approached for comment.