Chatime seeks to stop Loob Holding from selling similar products

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PETALING JAYA: The franchise owner of Chatime is seeking to stop its former franchise holder in Malaysia from selling similar products to theirs.

La Kaffa International Co Ltd is seeking a court injunction to restrain former master franchise holder Loob Holding Sdn Bhd and its agents from carrying out business identical to Chatime’s.

“There is a real risk that Loob Holdings will use and disclose our proprietary information,” the Taiwanese company said.

The arbitration process is ongoing in Singapore, it added.

The lawsuit was filed on Feb 17 and the Kuala Lumpur High Court has fixed May 29 to hear La Kaffa’s application for an injunction against Loob Holding.

In the affidavit, La Kaffa’s director Chen Zhao claimed Loob Holding had breached the terms of the main franchise agreement, leading to its termination.

“We began doubting them in January last year when they reduced the order of raw materials.

“This was in contrast to the increasing number of Chatime stores and growth in sales revenue,” he said.

He added they had sent numerous letters to their former franchise partner throughout 2016 over the drop in purchases.

Chen said Loob responded to their queries by asking for permission to buy products locally during a meeting last September.

“This showed they were aware they had violated the contract,” he said.

Chen also claimed Loob Holding had failed to pay La Kaffa a sum of US$713,273.72 (about RM3.1 million) for the purchase of raw materials.

The amount was later reduced to US$644,536.32.

Chen also said Loob Holding had issued many misleading statements to the media on the franchise dispute.

“They denied that they had used unapproved raw materials. It is a false statement,” Chen said.

Following the dispute with La Kaffa, Loob Holding recently announced a new brand to replace its Chatime outlets. It is now called Tealive with its own range of products.

Tealive has 161 outlets in Malaysia.

FMT’s attempts to reach Loob Holdings’ lawyers were unsuccessful.