The Mad Butcher's original store in Mangere failed because of "unsustainable" sales costs, the first liquidator's report says.

But a spokeswoman for Veritas Investments, the Mad Butcher's NZX-listed franchisor, said the company "disagrees strongly" with the liquidator's conclusions.

The chain's founding outlet, established by Sir Peter Leitch in the 1970s, was put into liquidation by its franchisee on July 15.

The Massey Rd store owes $465,014 to creditors, including $418,172 to suppliers and $18,264 in staff wages and holiday pay, according to the report by liquidator Peter Jollands, of Jollands Callander.

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He said the liquidation appeared to have resulted from "unsustainable cost of sales giving insufficient gross profit".

The Mangere outlet is one of 10 Mad Butcher stores that have gone into liquidation, receivership or been closed down, according to Veritas.

Two of the stores that had been through liquidation were trading again and a third, in west Auckland, would re-open in around six months.

Last week, Jollands told the Business Herald that the Mad Butcher's business model was flawed and unsustainable.

Veritas chairman Tim Cook hit back, saying he had been surprised by Jollands' lack of understanding of the business.

Cook blamed the franchisee for the outlet's demise, saying the store had been one of the Mad Butcher's more successful sites three years ago.

Leitch, the chain's founder, sold the store in 2013.

"Despite many offers to help and a rent holiday being negotiated on his behalf, the franchisee has been unable to turn around a consistent slide into poor performance," Cook said. "It is a lesson for all franchisee businesses that you can't simply buy a business and expect good performance to be maintained if you are not working in and on the business."

In April Veritas said its three divisions - Mad Butcher, Nosh and the Better Bar Co - were showing signs of improvement and underlying full-year profit was expected to be between $3 million and $3.5 million.