Hombre Mexican Cantina at Parkside Plaza in Mackay.
Hombre Mexican Cantina at Parkside Plaza in Mackay. Lauren Connor

No cash for creditors as Mexican franchise goes bust

HOMBRE Franchising and Lasing, the company that owned Hombre Mexican Cantina at Parkside Plaza owes almost $300,000 to companies throughout Queensland, according to a liquidators report.

The Australian Securities and Investments Commission report shows that by the time the company stopped trading in early January there was no cash flow - none in the bank or on hand.

After several months of insolvent trading leading up to the January closure of the restaurant, the only recoverable assets was $5000 worth of stock and $30,000 worth of equipment.

The $5000 worth of stock was written off as "perishable" according to the report, while two ANZ bank accounts were determined empty.

The liquidator has sold the plant and equipment at one corporate run store for $5000 plus GST, to the landlord of the store.

"No other recoveries are expected to be made from plant and equipment," the report states.

The report shows that the franchise owed money to at least 50 business, some traders in Mackay, including PFD, Bidvest, Schweppes and Mifsud's Fresh Fruit Barn.

Owner Mark Mifsud said he was less than impressed with being out of cash, but the money has been written off with no hopes of getting it back.

"When they go broke we just write it off, there's nothing we can do. All they do is pay the bank or the tax man, the creditors are always last in line," he said.

"It does suck but we know this kind of thing happens, Mackay's been known for fly ins that come in and start a business and just go again.

"All it does is rob money from the community, I like to support local organisations and now I can't.

"The more I can do for my business, the more it's better for Mackay and the more people I employ."

The report showed Hombre also owed around $30,000 to Knight Frank Mackay.

The $5000 recovered from the outlet will go to pay liquidation costs which the report shows will cost between $20,000 and $40,000.

Hombre's parent company, Franchise Retail Brands, before it was dismantled, has debts exceeding $7.7 million, with little hopes of recovering any cost to creditors according to the liquidator's report.

"As noted in section 1.3 of this report, no dividend is likely to be paid to creditors," the report reads.

The company included fast food outlets New York Slice and 1582 Coffee coffee roasters.

The company had almost $2.5 million in "other assets" but only $300 in cash in the bank by the time it ceased trading.

Some of the stock was liquidated through online portal Grey's Online, the total amount worth just more than $100,000, however only $26,000 was recovered.

A former shareholder says Franchise Retail Brands recently went into administration under a cloud of possible director misconduct and related party transactions.

"The FRB liquidator report concludes that the company was insolvent from at least August 2017 yet continued to trade until January 2018 racking up debts of over $7 million," the shareholder said.

"There was $6300 owed to employees from Hombre with unsecured creditors owed $295,540.

"The liquidator for Hombre identified a number of transactions that warrant further investigation and concluded that the company was insolvent from at least October 2017 yet continued to operate until January 2018."