The company behind the O'Briens Irish Sandwich Bars rescue package has told franchisees it is willing to purchase the business out of liquidation, not just examinership, if they cannot resolve leasing issues.

AIL Ltd, owned by Graeme Beere and Denis Desmond, has agreed with examiner Paul McCann of Grant Thornton to take over O'Briens on the proviso that all of the company's 82 franchisees agree to take over the leases on their premises.

Under the current O'Briens franchise model, the franchisees own their businesses but sub-let their premises from the company who have, in turn, leased the outlets from a landlord.

AIL maintains this business model is unsustainable and wants franchisees to take over the leases and deal directly with their landlords. If the franchisees accede to the proposal, they will benefit from any rent reductions negotiated by O'Briens before it went into examinership with debts of €4m in July. The company ran into trouble when it could no longer meet the cost of maintaining expensive leases on non-trading premises.

In a letter to franchisees outlining the proposal, Beere said that AIL's preferred option is that the company completes the examinership process successfully.

"A liquidation of the company may do reputational damage to the brand and to your businesses and should be avoided. It would be our intention to pursue a purchase of this business even if it was to go into liquidation but we believe that every day of uncertainty has the potential to devalue the brand and therefore the value of your investment," he stated.

It appears that the franchisees may have little choice in any case, having entered into mirror leases on their premises. If O'Briens goes into liquidation it is likely that the liquidator will apply to "disclaim" the head leases. In that case, the sub-leases will remain in place, meaning franchisees will ultimately end up taking over the leases anyway.

AIL representatives have been meeting with O'Briens franchisees since reaching an investment agreement with the examiner. Speaking to the Sunday Tribune, Beere said that they had had a positive response from key franchisees so far and that he remained positive that the business would survive in its entirety.

AIL will support stores breaking even, he said, but can make no promises regarding under performing outlets.