BURLINGTON, Ontario -- Afton Food Group Ltd., franchisor of the 241 Pizza chain, announced it will receive protection from creditors under Canada's Bankruptcy and Insolvency Act.
According to a news release, the move was in response to the demand and Notice of Intention to Enforce Security issued by the company's secured lenders, which declared it in default.
Afton also has obtained restructuring protection under Canada's Companies' Creditors Arrangement Act. That application, the company reported, was approved by its senior lenders, which include Rabobank Nederland Canadian Branch, Credit Union Central of Ontario and HEPCOE Credit Union Limited.
Afton, which also operates the Robin's Donuts chain, has struggled over the past three years to grow its system under the burden of an increasing debt load and sagging sales. In 2003 it lost CAN $25.8 million (U.S. $19.7 million) on sales of CAN $19.6 million (U.S. $14.9 million). In 2002 Afton lost CAN $17.2 million (U.S. $13.1 million) on sales of CAN $26.4 million (U.S. $20.2 million).