KUALA LUMPUR: Chatime franchisor La Kaffa International Co. Ltd of Taiwan’s move to terminate the franchise could affect over 1,000 workers and their families.
Master franchisee for Malaysia, Loob Holding Sdn Bhd said La Kaffa had recently decided to prematurely end the franchise, which has still 24 years to go.
The dispute between La Kaffa and Loob Holding came out in the open when La Kaffa announced at a press conference on Jan 6 that it had terminated the franchise and would immediately take over all the 165 Chatime outlets in Malaysia.
Chatime Malaysia’s 165 outlets accounted for more than half of the turnover recorded by the franchisor’s reported 800 outlets worldwide.
In a statement issued on Saturday Loob Holding CEO Bryan Loo said he was concerned about the loss of jobs over the termination of the franchise.
He said Loob Holdings was committed to look after the welfare of all staff and their families whose livelihood depended on the 165 outlets run by Loob Holding in Malaysia.
Of the 165 outlets, over 100 of them are owned and operated by Loob Holding and the rest are operated by sub-franchisees.
“While we seek legal advice to protect our legitimate rights and interests under the franchise agreement which only runs out in 2041, we are very much concerned over what will happen to these 1,000 over workers and their dependents.
“Although our agreement with them still has 24 years to go, they had unilaterally served us a termination letter on Jan 5.
Loo said the company’s management and supervisory staff have been liaising with all its outlet workers to assure them that their livelihood would be protected.
“We have lodged a police report against La Kaffa for the sudden termination and we will let the authorities take the necessary action according to the law.
“Right now, we are operating as usual and all our workers and sub-franchisees are assured of continued employment and consumers can continue to enjoy our offerings.
“Our team is in close consultations with the workers, partners and associates to work out a common future for all of us,” he added.
Loo said there had been disagreements and disputes over various business and operational matters in the past but these were all dealt with in accordance with the terms of the franchise agreement.