Brisbane developer fails to dodge a nearly $500k payout to Starbucks Australia

Brisbane-based developer Griffith Group has failed to set aside a $449,441.08 creditor’s statutory demand from Starbucks Australia after the Supreme Court of Queensland Justice Paul Smith determined that it did not have a “genuine dispute” against the debt.

The court affirmed that Griffith Group owed the American cafe franchise debt under an incentive deed, and determined that it will hear the parties on the question of costs.

The American cafe franchise store paid rent of $250,000 per year to Griffith, and as part of an incentive deed signed by the two parties in late 2024, had $150,000 of rent for the first Lease Year waived.

Rent abatement agreement

Further, in the incentive deed, the parties agreed to a rent abatement arrangement, contingent on the performance of the franchised cafe.

“This had the effect of creating a rebate for rent paid if the average weekly sales (AWS) of Starbucks were less than a nominated sum of money,” the court said.

The rent rebate meant that the effective $250,000 rent was adjusted according to the trading performance of the store in its first lease year.

According to the incentive deed, if the average weekly sales (AWS) in the first lease year were equal to or less than $45,000.00 excluding GST, the abatement amount was to be $30,900.00 excluding GST in the second Lease Year, which would then be increased by three per cent on the commencement of each subsequent Lease Year.

In the circumstances that the AWS in the first lease year are between $45,000.01 and $55,000.00 excluding GST, the abatement amount was $30,900.00 excluding GST in the second Lease Year, along with the same three per cent increase each subsequent Lease Year.

Finally, the second tier said that if the AWS in the first lease year was $55,000.01 excluding GST or more, Starbucks was to repay the landlord $30,000.00 excluding GST within 60 days after the first lease year.

Further, if the abatement did not apply and the AWS in the first lease year was between $45,000.01 and $55,000.00 excluding GST, Starbucks was to repay the landlord $15,000.00 excluding GST within 60 days after the expiry of the first lease year.

Quick sale

Starbucks Australia began operating out of Ripley Central on 27 March 2025 and entered into a lease agreement with Griffith the following month with a term of 12 years, at the $250,000 per annum plus GST amount for the first year.

In early July 2025, Griffith informed Starbucks that it was preparing to market and sell the property.

“It wished to sell the property on an unencumbered basis without the prospective purchaser assuming the landlord’s ongoing incentive obligations,” the court found.

“The Landlord will not sell or otherwise dispose of the Premises unless the purchaser or transferee has executed a deed in favour of the Tenant agreeing to be bound by this Deed,” the incentive deed said.

Planning to pay out Starbucks Australia from the incentive deed, Griffith’s solicitor actioned a variation of the deed, calculating a maximum incentive payout of $408,582.80 for the remaining 12 years of the lease based on the cafe’s projected AWS.

Starbucks disputed this figure, calculating the total payout to $485,760.89.

“[Starbucks Australia] noted that the $75,000 rent incentive could be made as it was not subject to AWS calculations, but the $15,000 for year 1 and $395,760.89 for years 2 to 12 would need to remain in trust until the AWS was known,” the court said.

In late 2025, Starbucks invoiced Griffith for $75,000 plus GST of $7,500 totalling $82,500 for the balance payout of the rent incentive based on the deed.

The cafe franchise asserted that it was not hitting the $45k weekly threshold, and told Griffith that, hence, the full $30,000 abatement would still be payable to the store.

“I’ll see if I can get something out of the finance team now to confirm this. Noting this, please have the outstanding abatement paid at the same time, no later than the end of this month,” Starbuck said in an email to Griffith in early 2026.

As a result, Starbuck asserted that it was not required to make any payment to Griffith as it was not hitting this threshold, “and the full balance of $449,441.08, as confirmed, was immediately due and payable” to Starbucks.

This followed an invoice issued to Griffith in April 2026 for this amount, which was followed by a creditor’s statutory demand the next month after the demand was not paid.

Average Weekly Sales

Starbucks Australia engaged PwC to review the sales record of the store, and its report found that the cafe had weekly sales of $39,221 according to the general ledger and $39,235 according to the store’s Point-of-Sale machine – both being below the $45,000 threshold.

The court found that following the delivery of these AWS statements, the $449,441.08 became payable by Griffith to Starbucks.

In its application to set aside this debt, Griffith asserted that it did not believe that the statements that Starbucks relied on met the requirement or definition of an audited statement, seeking that the demand be set aside due to a “genuine dispute about the existence of the debt”.

Griffith said that it did “not believe the AWS statement relied on by Starbucks meets the requirements or definition of an audited statement as contemplated in the Incentive Deed. As a result, the correct rent abatement amount cannot be calculated.”

Griffith gave evidence that “the demand should be set aside as there is a genuine dispute about the existence of the debt”.

“Griffith contends the amount is not a debt or liquidated demand,” the court heard.

The court did not accept the developer’s denial that it owed the sum pursued through the statutory demand by Starbucks Australia.

“The debt is due and payable, and there is no offsetting claim. There is no genuine dispute. There is no other reason to set aside the statutory demand,” the court said.

Upon consideration of all evidence, the Supreme Court of Queensland dismissed Griffith’s application to set aside the debt, and determined that it would hold a hearing to determine party costs.

The case citation: Griffith Group Ripley Pty Ltd v Starbucks Coffee Australia Pty Ltd [2026] QSC 256 (23 October 2026)