Australia’s 3rd largest pizza chain Eagle Boys enters into voluntary administration

Barely two weeks after the Australian restaurant giant Keystone Hospitality Group was placed under receivership on the last week of June, another Aussie restaurant could possibly leave local diners with lesser food choices. Eagle Boys, the third-largest pizza chain in the country, was placed into voluntary administration.

The Sydney Morning Herald reports that the head office of Eagle Boys called SV Partners, the administrators, on Thursday. Because of its shrinking share in the competitive pizza market in Australia, Eagle Boys has reduced its outlets to 120 from 340 stores across the country.

The company apparently could no longer pay its debts or may soon reach that point. Since the 2007 acquisition of an 85 percent stake in the company by NBC Capital, a private equity firm, besides losing customers, Eagle Boys had its share of controversies. It includes a plan by at least 30 franchisees, which had become bankrupt or insolvent, to file a class action lawsuit against the company.

Eagle Boys was established by Tom Potter, but in 2007, he sold the pizza chain to NBC Capital, reports Daily Telegraph. He blames NBC Capital for alleged strategic mistakes such as raising prices, changing brand positioning, poor advertising and revolving-door management for causing financial woes to the business.

Among the reasons why customers left, says Potter, is the removal of the guaranteed pizza within two minutes of arrival at the store for pick-ups. “Customers were leaving in droves to go to Domino because they were disappointed with Eagle Boys retail offerings,” Potter explains.

But Eagle Boys assured diners franchisees, employees and suppliers that it is “business as usual” while SV Partners conduct its review. The pizza chain accounts for about 4.6 percent of the country’s pizza market, dwarfed by Domino’s which holds 25 percent and Pizza Hut 10 percent. The fourth-largest, Pizza Capers and Crust, with a 4 percent market share, owned by the Retail Food Group, is speculated as a potential buyer of Eagle Boys.

VIDEO: Eagle Boys Pizza “Shrinking Pizzas” TVC