Pie Face went bust last month with 20 of its stores closed after a week. The collapse came after Pie Face quietly closed six of its seven stores in New York City earlier in the year. At the time of entering administration, there were 70 Pie Face stores in Australia with 43 of them franchised. The 11-year-old business, founded by former Wall Street banker Wayne Homschek and interior designer Betty Fong, has stores around Australia and in the US and Singapore and openings were planned for the Middle East, Japan, Korea and the Philippines. While the causes of Pie Face’s troubles have still not been identified there is speculation aggressive expansion is to blame.
Australian food franchise Pie Face has collapsed into voluntary administration.
In a statement released to SmartCompany, the Pie Face Group confirmed Jirsch Sutherland has been appointed as administrators. However, Pie Face said it is “business as usual” as the administrators conduct a review of the chain’s operations.
“The move comes as part of a wider company review, which will see the company focus on supporting the growth of its franchise-operated stores as well as the wholesale business,” Pie Face said. “The international businesses are not affected”.
A spokesperson for Pie Face confirmed to SmartCompany there are currently 70 Pie Face franchises across Australia, although the Pie Face website lists 78 outlets, including 15 in the Melbourne CBD and 20 in the Sydney CBD.
While Pie Face has previously attempted to expand into India and New Zealand without much obvious traction, the chain is also believed to have agreements to enter South Korea and the Philippines. The chain also became embroiled in a legal battle with a former franchisee earlier this year.
Former franchisee Prit Dutta sued Pie Face for $800,000 in February, alleging the pie chain was misleading and deceptive when communicating the expected returns for its franchise stores. The lawsuit followed reports in 2013 that around 50 Pie Face franchises were up for sale, although founder Wayne Homschek denied the reports to SmartCompany at the time, saying the claims were “totally blown … out of proportion”.
A) Identify and assess the internal factors for corporate failure in pie face for the recent past. ( 250 words)
b) Explain the implication of corporate failures on stakeholders of pie face including prit dutta a former franchisee. ( 250 words)
c) Suggest relevant commendations to prevent the corporate failure by referring to the elements of corporate governance. ( 250 words)
Key words :
sarbanes oxley act
UK corporate governance code
short introduction 75 words and conclusion 75 words