Burger King staff fearful for jobs after receivership announcement

The food giant operates 83 stores across the country.
The food giant operates 83 stores across the country. Photo credit: Getty

Staff at Burger King are nervous for their future after the fast-food chain's parent company was placed into receivership on Tuesday.

The food giant employs more than 2600 staff across the country and operates 83 stores.

Unite Union national secretary Gerard Hehir says the announcement has rattled staff, who are fearful for their jobs.

"[Workers] finally got Burger King to take up the subsidy and pay them the wages," Hehir told Newshub. "Having just got over that, now the worry will be what is the longer-term future is in terms of employment? So understandably they're quite worried."

Hehir claims Burger King's parent company is voluntarily washing its hands of its New Zealand restaurants.

"All the indications are that most fast food operators will bounce back very fast and there's no reason why Burger King should be any exception. They couldn't withstand a few weeks, with a Government subsidy," he said.

The shareholding companies that have been placed in receivership are Tango Finance Limited, Tango New Zealand Limited and Antares New Zealand Holdings Limited. However, their parent company is Blackstone Group, a US private equity firm which bought the franchise for around $108 million in 2011.

"This is not about a business owner that can't afford to pay their bills. Blackstone Group has nearly $200 million in capital that it can access," Hehir said.

In a letter to staff, Burger King's chief executive Michelle Alexander said the company "does not have the cash flow to fund creditors and rent payments", NZME reported.

She said the move to go into receivership was fuelled by the uncertainty surrounding the length of the lockdown and concerns over the country's economic recovery.

Grant Graham, of KordaMentha, said the food giant's finances have been significantly impacted by the COVID-19 lockdown.

Graham has been appointed as the company's receiver, along with Brendon Gibson, also of KordaMentha.

When approached for comment Burger King directed enquiries to KordaMentha. 

"The business needed more capital and [Blackstone] made the decision not to put more capital in," Gibson told Newshub.

He said KordaMentha aims to restart the business post-lockdown and find a new owner.