Loob to rebrand outlets after franchise deal terminated

Move could create rivalry with La Kaffa’s Chatime

PETALING JAYA: There is more than tea brewing with outgoing Chatime franchisee Loob Holding Sdn Bhd saying it will rebrand its 165 outlets by March 6.

This could set the stage for a rivalry between Loob’s new chain and La Kaffa International Co Ltd’s Chatime, should La Kaffa re-enter Malaysia after prematurely terminating its franchise agreement with Loob on Jan 5.

Loob’s agreement with La Kaffa was meant to last until 2041. It was terminated because of the Taiwanese firm’s disagreements on the business direction of Chatime in Malaysia.

Loob chief executive officer Bryan Loo said the company remained on track to expand its reach despite the shocking turn of events now that the company was no longer tied to Chatime’s bubble tea staple.

With nine brands still under its belt, he confirmed that Loob’s initial public offering was still in the pipeline.

“We aim to increase our customer base from 2.5 million a month to five million by 2018. We also want to increase our number of outlets from the existing 165 to 200.

“The genes of the company will still remain as a fast-drink outlet but we are no longer restricted to just bubble tea. We can reframe ourselves to also provide fresh juices and artisanal coffee,” he said at a briefing on Loob’s future plans.

Loob expects to spend not more than RM10mil for the rebranding exercise.

Clearing the air: Bryan Loo (left) and Loob general manager Loo Chee Leng at the briefing.

The company plans to expand operations into more petrol stations nationwide, as well as light rail transit and mass rapid transit stations.

La Kaffa issued a unilateral termination letter during what was supposed to be an ordinary meeting with Loob on Jan 5.

Loo said La Kaffa indicated there would still be room for negotiations but he claimed he was blindsided when La Kaffa announced that it was assuming control of the 165 Chatime outlets the next day.

“We felt ambushed. We were caught by surprise as there was no prior indication of termination. The franchisor does not own any properties or assets in Malaysia,” said Loo, who lodged a police report over the termination.

Arbitration proceedings against La Kaffa has begun in Singapore with Loob seeking to claim for damages against its brand and company.

Moving forward, he remains confident on the new brand’s ability to succeed, given that it would be by the same team that popularised Chatime.

“We have a six-year track record and fought off intense competition from over 40 bubble tea brands back in 2011 to become market leader in terms of number of stores.

“Our sub-franchisees have also indicated their support for the new brand,” he said.

The new brand would not be a big departure from Chatime as the logo would still sport a familiar purple colour and tea would still be the speciality.

Asked on the possibility of their new brand having to go up against Chatime itself, Loo candidly replied: “If they open a Chatime here, we will open an outlet next to them.”