Pie Face documents leaked

Around 50 Pie Face franchises out of the company’s 77 store network are up for sale, according to leaked internal documents.

A spreadsheet reportedly obtained by the Australian Financial Review from two different sources, shows that it is not just the franchises running at a loss, with sales and costs revealed for 13 company-owned stores.

Out of those company-owned stores, 12 made loses during the period of July, August, and September 2012.

The biggest loss on the spreadsheet was at the chain’s George St store in Sydney’s CBD, reporting sales of $99,000 and costs of $169,000 in the quarter.

Chief marketing officer, Ben Macpherson, said the numbers “appear to be either incorrect and/or incomplete”.

“A significant proportion of our company stores are delivering profits to the group,” he said.

The news comes following claims in January by three franchisees of the gourmet pie chain who said they were planning to sue the parent company, claiming the business misled them over costs and profits.

The Pie Face trio, told the AFR at the time that actual profits from their Brisbane-based businesses were “totally different” to what Pie Face had projected.

Pie Face CEO, Wayne Homscheck, defended the business back in January, saying “no misleading or inaccurate cost information has been provided to franchisees”.

“The reality in franchising is that running a successful franchise is 80 per cent based on the person,” Homscheck said.


Pie Face has since released a statement following claims 50 stores of its 77 store network are up for sale, saying the implication is inaccurate.

The company said only 23 of its stores are listed for sale, 16 of which are franchised stores. Twenty-five of the stores for sale are brand new stores currently in development, which have not yet opened.

“Pie Face’s growth strategy in part is to find appropriate retail sites, open stores and franchise them. Properly understood, the number of new and proposed stores we have available to buy is really a sign that Pie Face is successfully delivering on our growth strategy.

“A significant portion of company stores are delivering profits to the group. There are many reasons why a company store may not be trading profitability at any particular point in time – it may be new and still building its local customer base and operations or it may have been re-purchased and in the process of being turned around by the company.

“A profitability snapshot taken at a particular point in time will never portray a complete or accurate picture of what is happening at a particular store or in the business. In terms of its franchise network, Pie Face has a good relationship with its franchisees.”

The company added there was currently no legal proceedings against the chain. According to the statement, Pie Face has 25 new stores in the pipeline in Australia and expansion to New Zealand and the US.

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