KUALA LUMPUR: La Kaffa International, the Taiwanese owner of the Chatime brand, today assured Malaysian sub-franchisees that it would continue to support them.
It said in a statement that its priority was to protect the interest of Malaysia’s Chatime consumers, and that of Chatime franchisees and their employees’ rights.
La Kaffa recently terminated the master franchise agreement with Loob Holdings of Malaysia.
The statement claimed Loob had breached the agreement and that “a substantial amount of money was owed to La Kaffa, with some amounts outstanding for more than a year.
It charged that Loob had also breached the agreement by having used and supplied “raw materials that were not part of the approved recipe” without La Kaffa’s approval.
“It is a serious violation within the agreement where the ingredients used could and might in the future, jeopardise the brand’s image and is a violation that we at La Kaffa take very seriously.”
FMT had earlier reported that both companies had initiated legal action against each other over the sudden termination notice.
Loob Holdings last month lodged a police report alleging that the sudden termination breached the terms of the agreement which gave the company franchisee rights until 2041.
Malaysia is the second biggest market for Chatime, next to Taiwan. It was previously reported that Loob Holdings had said the Malaysian outlets generated more than 50% of the food and beverage chain’s global revenue, excluding Taiwan.
On Jan 25, Loob Holdings CEO Bryan Loo had said the company was moving on following the termination and that it would be rebranding all the outlets it owned.
Loo had then said the new brand would be launched after a 45-day winding down period, as stipulated in its agreement with La Kaffa.