Receivers of master franchise holder, called in by Heartland Bank, are working to prepare company for sale.
The company that runs Nando's New Zealand went into receivership to avoid its franchise agreement being terminated by the global spicy chicken chain's Australian arm, says the businessman who has operated the brand in this country for the past seven years.
It has also emerged that Heartland Bank is the secured creditor that appointed receivers to Auckland-based Shivram, which has held the local master franchise for the 31-store national restaurant chain since 2006.
Melbourne-based Nando's Australia ultimately holds the licensing rights to the brand in New Zealand.
On Friday evening, receivers Kare Johnstone and William Black, of McGrathNicol, announced they had been appointed and had taken control of Shivram and its assets.
"Our objective is to work constructively with Shivram's key stakeholders to stabilise operations, to facilitate a thorough assessment of the company's financial position and prepare the business for sale and transition to a new owner," the receivers said.
Nando's New Zealand stores, which are run by independent franchisees, are not in receivership and continue to operate as normal.
Earlier on Friday the Business Herald revealed that Shailen Ramjee, Shivram's sole director, was copping flak from a group of disgruntled former and current franchisees, including complaints that a lack of national marketing was stifling the chain's growth in New Zealand.
Several store owners are also owed money on loans provided to Shivram.
Heartland Bank's chief risk officer, Mark Mountcastle, confirmed the lender was the secured creditor that had appointed receivers.
Mountcastle was unable to disclose how much Heartland was owed by Shivram or why it had chosen to appoint receivers.
But Ramjee said he and Heartland had agreed on the receivership, which would "protect the assets so that everybody can be paid".
Shivram's only asset was its franchise agreement with Nando's Australia and there had been a risk that the agreement might be terminated, he said. Ramjee said he could not comment on why Nando's Australia might have wanted to terminate the franchise agreement.
Nando's Australia managing director Craig Mason said that since Shivram was in the hands of receivers it would be inappropriate for him to comment on his firm's relationship, or perception of, that company.
"What I have said previously is that we support the decision of the financier [Heartland] to appoint receivers to Shivram," Mason said. "Our focus is, and will continue to be, our ongoing commitment to the ongoing sucesss of Nando's restaurants in New Zealand."
On Friday, Mason said Nando's Australia supported the receivership and would offer "expert technical operations" and business development support to the New Zealand franchisees and the receivers.
Ramjee said he was working with the receivers to settle Shivram's debts and ensure the brand "continues to work profitably".
"I continue to support the brand fully and I'm doing everything possible to ensure no franchisees are affected," he said.
Ramjee would not disclose Shivram's debts and the receivers said they were still assessing the company's financial position and were unable to comment on the amount the company owed, or who its main creditors were.
The receivers said there was "significant interest" from potential buyers for the master franchise.
Nando's - best known for its flame grilled peri-peri chicken - was founded in South Africa in the late 1980s and now operates more than 1000 restaurants in 30 counties.
New Zealand's first Nando's store opened in Glenfield, on Auckland's North Shore, in 2000.