Malaysian Chatime franchisees throw support behind master franchisee Loob

La Kaffa International Co Ltd chairman Henry Wang speaks during a press conference on Jan 6, 2017.

KUALA LUMPUR: Franchisees of Chatime Malaysia are throwing their support behind master franchisee Loob Holding Sdn Bhd which has held the Chatime franchise in Malaysia for six years now.

On Friday, brand owner and franchisor Taiwan-based La Kaffa International Co Ltd chairman Henry Wang said they have terminated a master franchisee agreement with Loob following disagreements over ingredients and royalties.

Loob in a statement issued after the announcement last Friday, however, said it remains the master franchisee of Chatime in Malaysia and is seeking legal advice on the purported contract termination. It said that although La Kaffa owns the brand, all 165 Chatime outlets in Malaysia are owned and operated by Loob, either through direct ownership, joint ventures or franchisees.

Franchisees SunBiz spoke to attributed the success of Chatime in Malaysia to Loob, founded by entrepreneur Bryan Loo, given that the brand is less well known in Taiwan. They praised Loob for being attentive to franchisees and providing good business support, especially in marketing.

“Whatever that’s going to happen next, I think all of us are behind him (Loo). We will follow him. He made Chatime big here and we have faith in him,” a Chatime Publika franchisee said.

The franchisee said it is too soon to tell whether business has been affected by news of Loob’s purported contract termination. Another outlet noted that business is still all right.

“I have other franchises and I feel that Loob really supports their franchisees a lot,” said the franchisee, commending Loob’s marketing efforts that range from social media marketing campaings to having joint promotions.

“We know what Loob’s plans are and what they’re going to do next and all we need to do is to stick to them,” said the Chatime Publika franchisee.

Another franchisee who runs a Chatime outlet in the Klang Valley via a joint venture with Loob said a meeting is expected to be called by Loob this week to explain matters to franchisees.

Besides Chatime, Loob manages a diverse portfolio of food and beverage brands in Malaysia, including Tino’s Pizza, Soda Xpress, Llaollao and Gindaco, with technology start-up investments in the pipeline.

On Friday, La Kaffa chairman Henry Wang said in a press conference that it had terminated the master franchisee contract with Loob Holding and will take over the Malaysian Chatime business operations and development with immediate effect.

"After much communication, an agreement has not been reached and we have decided to terminate the contract with Loob. To the franchisees, rest assured that they will continue to receive the full support from the company (La Kaffa). We also welcome anyone who is interested in joining the Chatime family to continue providing Malaysian consumers with high-quality products and services,” he said.

La Kaffa executive vice-president Teresa Wang said it has been preparing to take back the Chatime franchise in Malaysia from a year ago. “Chatime is a global brand and as long as we follow the brand strategy, we still have confidence in the Malaysian market.”

Chatime is a Taiwanese franchise founded in 2005 with over 800 retail outlets in China, Australia, Dubai, Canada, the UK, the US and others.

La Kaffa, which operates food and beverage brands in over 30 countries, plans to set up its first regional operation centre in Malaysia in the first quarter which will provide a platform to launch local Malaysian delicacies and food & beverage brands to the world.