Another Hog’s Breath Cafe location has filed for bankruptcy, a worrying trend considering nearly half of all franchise stores have closed in the past decade.
Hog’s Breath Cafe in Mildura, a rural town in northwestern Victoria on the border with New South Wales, was placed into administration on September 20.
The restaurant went bankrupt just two years after it changed ownership in 2022.
Mark Brereton of HoganSprowles was appointed as administrator and the company’s first creditors’ meeting was scheduled for October 3.
Administration differs from liquidation because it gives the company a chance to recover after it has faced significant financial stress.
This follows the liquidation of three Hog’s Breath franchisees in Tuggerah, Orange and Coffs Harbour, NSW, last year.
The Central Coast location reportedly struggled to get back on track after the pressures of Covid-19 lockdown restrictions in 2020 and 2021.
Just seven years ago, Hog’s Breath Cafe had 80 thriving locations, but by 2021, the number of locations had nearly halved to just 47 remaining.
Hog’s Breath Cafe Mildura (pictured), in Victoria’s northwest, has gone into receivership
The restaurant chain has been forced to close nearly half of its locations over the past decade
In 2019, about a dozen stores were forced to close their doors after their owners went bankrupt or lost valuable assets.
Ross Worth, former CEO of Hog’s Breath Cafe, said at the time that the company was facing “the most difficult circumstances we’ve experienced in 30 years.”
According to Mr Worth, there were a number of factors that led to the closure of several stores, including changing customer eating and drinking habits.
“In addition to a decline in spending, consumers have also significantly changed their eating and shopping habits with the advent of meal delivery services and the increasing use of meal kits,” he said.
“We are also experiencing an increase in operational costs, due to rising wages, raw food costs, rent and electricity.”
Iconic Australian restaurant chains have seen their stores across the country close for good after facing financial pressures due to the Covid-19 pandemic (Hog’s Breath Cafe in Logan)
The pandemic forced locations in Palmerston, Carindale, Albury, Forster and Canberra Civic to close between December 2020 and February 2021.
The seven locations still operating in Victoria are in Mildura and Traralgon.
In NSW Hog’s Breath, customers will find stores in St Marys, Wagga Wagga, Penrith, Port Macquarie and Nelson Bay.
There are only 26 stores open and operating in the whole of Australia. More than half of the stores are in Queensland, with the rest spread across Western Australia, Tasmania, Victoria and NSW.
Despite many Hog’s Breath franchises closing, CEO Steven Spurgin announced a plan to revive the brand last year and was looking for new locations.
New restaurants are being built with a smaller floor plan, so that rent, gas and electricity costs can be reduced. We also want to ensure that there is sufficient staff.
In images of the new restaurants, customers sit at long metal and wood tables with modern, light-colored furniture.
New restaurants are built on a smaller footprint to reduce rent, gas and electricity costs and to ensure that the restaurants have sufficient staff (the photos show the drawn floor plans).
Rendered images of the new restaurants show customers sitting at long metal and wood tables with modern, light furniture (pictured)
A smaller location would save costs but also offer a more intimate dining experience, which is now preferred by the majority of customers, according to the CEO of Hog’s Breath Cafe
Mr Spurgin said this was in line with a global trend of downsizing due to staff shortages, but would also provide a more intimate dining experience, which is now preferred by the majority of customers.
“The changes implemented, including a new restaurant size and new interior design, ensure the franchisees and the brand remain sustainable,” he said.
“We have many successful restaurants and happy franchisees and we are confident that the brand can continue to grow under the new management, with a new interior design and new restaurant size, and that we can continue to innovate in the post-Covid world.”