Three Cold Rock Ice Creamery stores in Queensland have been placed into administration after being taken to court for breaking their franchise agreements.
The franchisees of three Townsville stores attempted to re-brand the outlets under the name ‘If Icecream Factory,’ while continuing to use the Cold Rock concept.
Based on the “create your own” experience of adding lolly, fruit and nut mix-ins into ice cream, the concept involves refrigerating these custom creations on a granite slab known as the Cold Rock.
Melbourne-based Franchised Food Company (FFCo), which owns the ice cream chain, sought an injunction against the franchisees Paul Bailey and Tammy Hawkins-Bailey in the Federal Court.
FFCo Managing Director Stan Gordon said the franchisees actions at their Canon Park, Magnetic Island and The Strand stores were a breach of trademark and intellectual property rights under the Competition and Consumer Act.
“When one enters into any contract there are obligations on all parties, and the ex-franchisees unilaterally decided not to comply with their ongoing obligations under their various agreements.”
“This resulted in Cold Rock management seeking a court injunction to stop the blatant copying of the Cold Rock system. At the eleventh hour, these rogue businesses were placed into administration in order to avoid the ramifications of infringement of our brand.”
According to Gordon, the company had tried to negotiate with the franchisees but in the end the matter had to be taken to court. The insolvency firm Korda Mentha has also been appointed administrator.
“While we are saddened that anyone loses their assets, we have to at all costs protect our brand, not only for the owners, but for all Cold Rock franchisees. We remain committed to work with the administrators and the landlords to try to minimise any losses that will be suffered through this transaction.”
Cold Rock management, which oversees the 100 Cold Rock stores nationwide, is negotiating with the administrators to resume control over the stores before they seek new franchisees.