This year we’ve seen major music retailers collapse, the music festival market struggle, and now the Australian franchise of an music-themed chain is looking to go under.

The Hard Rock Café restaurants located in Sydney and Surfers Paradise have been placed into voluntary receivership as the Australian arm of the rock n roll restaurants collapses, leaving creditors owed more than $4 million in debt, as the Brisbane Times reports.

The themed diners, which serve up music memorabilia and collectables as well as beer and BBQ ribs, have already laid off staff at the two Australian locations following accountancy firm Cor Cordis being appointed as administrator in June. Mounting debts saw more than 100 employees left out of picket, with over $1 million (mainly in unpaid superannuation) going unpaid.

The franchise owes trade creditors – including food and beverage providers, equipment suppliers, tourism agencies, and trade workers – debts ranging from $145k to $500k per company, have been advised they are “unlikely” to recoup their losses.

The spiralling debts and brutal administration show just how hard the Australian brand has fallen since its glory days, opening its first Down Under diner in 1989 on Crown Street in Sydney’s Darlinghurst. For the grand opening, around 900 people ogled the venue’s rock and roll memorabilia in the musical museum, paying up to $200 for the privilege while chowing down on all the American styled trimmings. Mounting debts saw more than 100 employees left out of picket, with over $1 million (mainly in unpaid superannuation) going unpaid.

The Australian franchise ran in tandem with the original branding, until 2007 where even regular celebrity appearances and musical star cameos at chains around the world couldn’t stop the shutters from falling on Hard Rock Café. The same year, business partners Lionel Huntly and David Rich bout the Australian arm from the US parent company of Hard Rock Café.

In December 2011, they re-located and renovated the Sydney diner, to its current 500 capacity location at the Darling Harbour address. During the grand reopening, Mr Huntly championed Hard Rock Café’s “staying power,” declaring: “If music went out of fashion, Hard Rock would go out of fashion. Music will never go out of fashion.”

Fashions have certainly changed, and while demand for music has changed yet not diminished, sadly the same can’t be said for music-themed restaurants.

In November 2012, Rich declared bankruptcy, then in June this year, Hard Rock continued to operate in hopes to broker a sale. A creditors meeting with administrators Cor Cordis held in August this year indicated that the Hard Rock financial collapse was because the business had “underestimated” the capital and operating costs required to trade.

ASIC (Australian Securities and Investments Commission) documents obtained by the Brisbane Times show that Huntly’s related companies, Hard Rock Cafe Sydney Pty Ltd and Goddings Pty Ltd, owe $1 million to parent company Hard Rock Cafe International as well as over $450,000 to the Australian Tax Office.

The Hard Rock franchise has already being overturned from Mr Huntly, the sole director, over to new owner, Jeff Beaumont, who confirms he will take on a “large proportion” of the staff debt.

“Trying to sell a retail business in this climate is virtually impossible, so this is a positive result for employees, many of whom also kept their jobs,” says Cor Cordis partner Mark Hutchins, adding: “There was too much debt. Unfortunately, a whole litany of creditors have been torched in the process.”

Mr Beaumount has already vowed to reinvigorate and develop the brand, including the registration of ‘Hard Rock Café Bondi’ as a new company for a 2014 launch. “What happened before was very unfortunate, but I’m trying to make the best of a bad situation,” says the new Hard Rock licensee. “There have been so many costs to bring the business back up to speed, but we’re getting there.”

Meanwhile, a spokeswoman for parent company Hard Rock International added: “At this time, the two locations are working through an administration plan with the previous franchisee, but Hard Rock remains committed to the existing cafe locations in Australia.”

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