Chatime: Loob denies unapproved recipes, unpaid royalties claim

chatimePETALING JAYA: Former Chatime master franchisee for Malaysia, Loob Holding Sdn Bhd, has denied using “unapproved ingredients” or delaying its payment of royalty fees as alleged by La Kaffa International Co Ltd.

In responding to the statement made by the Taiwanese franchisor last Friday, Loob Holdings CEO Bryan Loo called the allegations “false and malicious”.

“We vehemently deny all the false and malicious allegations set out in La Kaffa’s media statement. We continue to reserve our rights to take all action, and to explore all avenues, to protect our rights in this matter.

“This would include availing ourselves to all the remedies under the terms of our franchise agreement,” Loo said, adding that Loob does not wish to engage in litigation through the media and will let the legal process take its course.

Addressing the allegation that raw materials used were not approved by La Kaffa, Loo said it gives the wrong impression that there had been a compromise in the quality of the Chatime products sold here.

“This is entirely untrue. This had not been part of La Kaffa’s contentions, at any time, in the on-going dispute between the parties.

“Also, Loob had made early substantial investments to secure an aggregate 30-year tenure ending in 2041. Hence, the company would not commit any act to jeopardise its investments.

“Loob has outstanding claims against La Kaffa. Any amounts alleged to be due from the company to La Kaffa, if established, will be set off against the former sums,” Loo said.

International partners

According to Loo, his company had 10 brands under its management and maintains a good reputation with other international partners.

“Loob has been accredited by five franchisors from four countries, including well-known international partners. It has fully earned its sterling reputation as a ‘master franchisee’ for these brands in Malaysia and will continue to maintain this reputation,” he said.

Loob and La Kaffa are now expected to settle any legal disputes with an arbitration in the Singapore International Arbitration Centre, as is stipulated in the Master Franchise Agreement, Loo revealed in a statement released today.

“The company fully respects its obligations in this regard and will say no more than is necessary about the dispute between the parties. It hopes that La Kaffa will similarly respect its obligations.

“We wish to assure all our customers that we will continue to innovate our products through ‘product localisation’ for all our brands. The Loob team has always prided itself on the fact that we had built up the business in Malaysia and we will never compromise on the quality of our products,” he added.

He said the company would now focus all its energy and resources on moving forward in its growth story with its 1,000-strong workforce, which is now already serving two million customers every month.

On Jan 25, Loo revealed that Loob had only 45 days left to rebrand itself as per the winding down period stated under the agreement, in the event of termination.

Last week, Loo had released a statement saying that his team was working hard to rebrand the existing Chatime outlets under its control and to revive it next month under a new brand called “Tea Is Our Life”.

The dispute between Loob and La Kaffa sparked in early December when the Taiwanese company abruptly terminated the contract, despite there being another 24 years left for Loob to be the master franchisee for Malaysia.

The contract was to run until 2041.

Loo had lodged a police report over the termination, stating La Kaffa should abide by the law.

Tea Is Our Life to replace Chatime

Chatime: Malaysian franchisee used unapproved ingredients