La Kaffa confident of Chatime model in Malaysia

PETALING JAYA: Chatime franchisor La Kaffa International Co Ltd believes there is strong support for Chatime’s products and business model in Malaysia, despite Loob Holding Sdn Bhd’s plans to start a new brand of tea stores following its termination as the master franchisee for Malaysia.

Loob will cease using the Chatime brand 45 days after Jan 23, 2017 when it officially accepted the termination and will unveil its new brand by March 6, 2017.

La Kaffa said as the owner of Chatime’s brand, the company’s main priority is to protect Malaysian Chatime consumers’ interests and Chatime franchisees’ and employees’ rights.

“We at La Kaffa consider product quality one of the most important promises to Chatime franchisees and customers. Loob Holding breached the master franchisee contract when it used and supplied raw materials that were not part of the approved recipe without La Kaffa’s approval,” a La Kaffa spokesperson told SunBiz yesterday.

La Kaffa said it will continue to support Chatime Malaysian franchisees, and that in turn will protect the employment of all business partners. It did not elaborate how it plans to take over the Malaysian Chatime business operations and development.

The Taiwanese franchisor is hopeful of an amicable resolution, but remains committed to ensuring that Chatime customers, franchisees and employees can continue to enjoy the Chatime experience in Malaysia.

“We do not intend to provide a running commentary on confidential negotiations and discussions. We are comfortable with our legal and commercial strategy,” said the La Kaffa spokesperson.

Earlier last month La Kaffa announced it was taking back the Chatime franchise under Loob, claiming breach of contract. This led Loob to lodge a police report against La Kaffa.

There are 165 Chatime outlets in Malaysia, about 100 of which are directly owned by Loob.

Chatime franchisees contacted by SunBiz have thus far thrown their support behind Loob, which has held the Chatime franchise in Malaysia for six years.