Embattled franchise Refund Home Loans has been sold in a deal the administrator claims will best benefit franchisees.
In a letter to franchisees, administrator SV Partners has said they have received an offer from State Home Loans, and expect to sign a contract within days. The sale will be for the business as a going concern.
SV Partners said the sale required as many franchisees "as possible" to continue operating under the franchise. The deal will also see continuing franchisees paid all upfront and trail commissions owing. Clients who are owed refunds on loans written by continuing franchisees will also be paid.
Franchisees who terminate their agreements will not be entitled to receive ongoing upfronts or trails. However, SV Partners said it would continue to administer the loan book of terminated franchisees, and that these franchisees will claim as unsecured creditors.
The administrator said finance for the deal is in place, and settlement is expected on or around 30 March 2012. It also assured franchisees that Refund founder Wayne Ormond had no interest in the buyer's company, and was in no way party to the offer.
SV Partners said it accepted the offer from State Home Loans because it was not subject to finance, and was for the business as a going concern. The administrator claimed the sale would provide the most positive outcome for all involved.
"In our opinion, the sale will provide the best possible return to continuing franchisees and as good a return, of not better, to terminated franchisees and other unsecured creditors than any of the alternatives," SV Partners said.
The administrator told franchisees that following the sale, an outline would be provided which would describe the buyer's intentions with the Refund name, any changes to the company's business model, the nature of advertising and amount of advertising levies and other organisational moves. One change revealed by the administrator will be a move from current aggregator Choice to an as-yet unnamed aggregator.