ANOTHER ICON of the boom has run into serious financial trouble with a decision of the High Court to place O’Brien’s Sandwich Bars in examinership, a process that temporarily protects the business from creditors while it works on a rescue plan.
Known for its chunky “doorstep” sandwiches, O’Brien’s has debts exceeding €4 million, including €3.4 million it owes Bank of Ireland.
Its franchise business employs 20 staff directly and another 800 indirectly in 85 Irish stores. It runs a total of 220 outlets in 13 countries worldwide.
Although the court was told that an unspecified number of the 85 Irish outlets are to be closed as part of a plan to ensure the company’s survival, the company said last night that “all stores” continued to trade normally.
O’Brien’s chairman Brody Sweeney, who established the company in 1988, said in a statement that franchisees were not subject to examinership. “We are taking this action in an effort to restructure the business for the benefit of our franchisees, and to protect jobs,” he said.
Mr Sweeney, an unsuccessful Fine Gael candidate in the 2007 general election, blamed the firm’s troubles on the collapse of the property market.
“A number of our franchisees are struggling to pay their rents, as footfalls in shopping centres and high streets across the country fall and consumers are spending less. This in turn puts pressure on our own company, as we hold the head leases for most of the outlets in the chain.
“We have had to close a number of stores as some landlords remain intransigent and refuse to reduce rents and some of our franchisees have been struggling to pay their rents for the same reason . . . We regret that we and our landlords find ourselves in the situation we do. We are seeking the least negative alternative for all the parties involved.”
In his book Making Bread, Mr Sweeney recounted how O’Brien’s incurred losses in its first six years – “more money each year than the year before”. However, the business eventually became very profitable in the expanding economy as many workers stopped making their own sandwiches for lunch.
Mr Sweeney opened his first outlet at South Great George’s Street in Dublin with the help of £50,000 in bank loans raised in an unconventional way.
He simultaneously borrowed £7,000 from each of three banks “to furnish a flat” and described the £21,000 so raised as savings when borrowing £29,000 from Bank of Ireland to set up the firm. This led to years of pain and heartache, he wrote.
After the 2007 election, Mr Sweeney said he knocked on 50,000 doors in the Dublin North East constituency and spent between €80,000 and €100,000 on his campaign.
He secured 3,529 first preference votes and was eliminated in the second count. “I was sure I was going to get the seat,” he said afterwards.