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SumoSalad enters voluntary administration to fight Westfield over rent

 

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Fast food chain SumoSalad has entered voluntary administration in a bid to negotiate a rent cut with Westfield operator Scentre Group.

According to the Australian Financial Review, the co-founder and CEO of SumoSalad Luke Baylis said he has tried over the past six months to negotiate cuts in leasing charges, but has been unsuccessful.

Baylis said SumoSalad is asking for “more realistic food court leases” as the company’s profitability has been affected by shopping centres dramatically increasing the number of food retailers.

He said having to pay “millions of dollars” to get out of the existing leases would send franchisees broke.

Entering voluntary administration would allow SumoSalad’s franchisees to move out without paying out the remainder of the lease.

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“Placing the leasing entities into voluntary administration is the only way to protect our franchisees, and we are confident this will help us restructure our leasing entities in a manner that will create more favourable conditions for our franchisees,” he said.

ARA lobbying Government on low value GST legislation

The Australian Retailers Association (ARA) has today launched an advertising campaign calling on the Government to pass the low value GST legislation that will be in front of the Senate today.

Executive director Russell Zimmerman said the campaign isn’t about stopping Australians from purchasing from overseas retailers, but providing a level playing field for local stores.

“Australian retailers continually have to pay GST while their foreign counterparts do not, and local online and bricks-and-mortar retailers are sick of the constant delays in implementing this tax equality issue,” he said.

“The retail industry is already operating in a tough environment and any delay to this much-needed legislation will significantly affect employers and employees working in this sector.”

In other news…

Could Amazon’s arrival be the shake up Australian retailers need? Our contributor Anouche Newman argues that Australian retailers will need to improve in order to hold their own against the online giant, and that this isn’t such a bad thing.

Retailer profile: We visit homewares store ur place in Sydney’s Sutherland Shire, which proves stocking a limited product edit can be very successful.

Using social media to grow your brand: It’s near impossible to be in retail these days and not be on social media, but it can be hard to keep up. We spoke to four very different retailers and asked two questions: How important is social to your store’s strategy and what are your top tips?

4 ways retailers are failing to meet customer expectations: Are you guilty of any of these?

The convenience stores leading the way on mobile innovation: From 7-Eleven’s fuel pricing app to Caltex’s new lunchtime ordering.

 

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  • Michael Ratner

    Luke Baylis has just become my new HERO.
    Strategically this move is brilliant. Franchisees are fortunate to have him as a Franchisor.

    • Ruth Cooper

      It will definitely be interesting to see how it plays out. Hopefully all goes well for the franchisees and they can come to an agreement.