Veritas Investments said it has reached a confidential settlement with Phil Mead, a former franchisee in the Nosh group who sought to terminate his franchise agreement after buying the business just days before Veritas disclosed it was under pressure from its bank to sell the upmarket supermarket chain.
On Febraury 24, Auckland-based Veritas completed the sale of its Nosh Group Ltd franchisor operation for about $4 million to Gosh Holding, whose Sydney-based owner Andrew Phillips, renamed it the same day as Nosh Group. The food and beverage investor took on a $5m funding line with ANZ to buy the Nosh stores in 2014 but has struggled to turn the gourmet supermarkets into a profitable business.
Mead's Constellation Drive Food Market had served notice to terminate its franchise, a move disputed by Veritas's Old NGL Ltd.
"Under the terms of the settlement, Constellation Drive Food Market has agreed to pay an undisclosed sum to Old NGL Limited to settle all debt, claims and disputes concerning that franchise," Veritas said in a statement to the NZX today.
Mead's lawyer Shane Rohde said he was unable to comment on the settlement.
Last month, Veritas said it would book a loss of between $2.2m and $2.6m on the sale in its annual accounts.
The $3.98m sale included about $1m of stock. Veritas valued Nosh's assets at $7m with $2.6m of liabilities at the December 31 balance date.