Veritas Investments has agreed to sell its Mad Butcher franchisor business to chief executive Michael Morton for $8 million, less than a quarter of what he sold it to the food and beverage investor for in a reverse listing almost five years ago.

Auckland-based Veritas has entered into a conditional deal to sell the business to Yogg Ltd, which is owned by Morton and his partner Julie Leitch - business founder Sir Peter Leitch's daughter - for a gross consideration of $8m, it said in a statement.

That includes an amount to discharge Veritas' trade creditor liability and the balance will go towards repaying ANZ Bank New Zealand, which has effectively been overseeing a wind-down of the business to claw back as much of the $28.5m the lender's owed.

The deal is subject to shareholder approval given it will change the nature of the business by leaving The Better Bar Co as the sole operating unit, and because the value of the deal is more than half Veritas' average market capitalisation, which was recently $2.4m.

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Veritas hired Bancorp Corporate Finance to manage a sale process for the meat franchisor business and attracted three bids. Morton declared his interest in October and was excluded from board discussions on the sale.

"The independent directors fully support the proposed Mad Butcher sale transaction and recommend that shareholders vote in favour of the resolution to be put to them for the proposed Mad Butcher sale transaction at the special shareholders meeting," chair Tim Cook said.

The distressed sale contrasts with the $40m price tag Veritas paid for the franchisor business in 2013, of which Morton received $20m in cash and $20m in shares.

The company raised $25m to help fund the deal which had debt financing from ANZ, an underwrite from Craigs Investment Partners and a sub-underwrite from Collins Asset Management.

At the time of the deal, Grant Samuel put a value on the Mad Butcher franchisor of between $42m and $48m.

Veritas has hired Simmons Corporate Finance to provide an independent appraisal for shareholders before the meeting.