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Most Burger King outlets will remain open until a buyer is found.
A compromise has been reached between landlords, creditors and the operators of Burger King.
The compromise, announced on Wednesday, will allow the fast food restaurant chain to continue trading until a buyer can be found.
But five stores, Lambton Quay, Courtenay Place, Queen Street, Takapuna and West City, are now in formal consultation to be closed.
Franchise operators Antares Restaurant Group said the compromise allowed it to move forward with the process to sell the burger franchise outright.
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“[We] are confident of finding a new owner who is committed to the long-term future of Burger King in New Zealand, supported by the strength of the Burger King brand and by the loyalty of our valued team members, supply partners and guests, “a media release from Antares said.
Burger King’s New Zealand owners, Tango New Zealand Ltd, went into receivership on April 14 after the fast food chain took a significant hit during the coronavirus lockdown.
To prepare for the sale, creditors, including restaurants’ landlords, have been asked agree to a compromise deal, which would see them receive some of the money they were owed.
Creditors were given until 4pm yesterday to agree to the deal.
All team members at the restaurants set to close were had been notified of these possible closures and a consultation process was expected to begin this week.
“We appreciate that this is upsetting news to those affected and management will provide all possible support and are working to redeploy affected individuals to other Burger King restaurants where possible,” Antares’ media release said.
Documents lodged at the Companies Office on May 6 showed $ 50 million was owed to senior lenders.
The receivers, KordaMentha, had previously said the lenders are a consortium of ANZ, ASB and Rabobank.
The banks supported the compromise deal, and had agreed to share half of any sale proceeds over $ 30 million if the company was sold as a going concern.
They had also forgiven some interest payments and provided an overdraft to assist in the restart of the business.
At April 1, the company had other creditors of approximately $ 11.8m, plus monthly rents of $ 1.7m it could not meet, compromise deal documents said.
Burger King first opened in New Zealand in 1993, and has 83 restaurants with over 2,600 staff.
