Donut King Heads To China
By Jack - Comments - July 4th, 2008
Leading Australian retail food brand manager and franchisor Retail Food Group Limited (RFG) today announced that they will look to grow their Donut King franchise in China.
RFG has reported that they have finalised the terms of a Master Licence Agreement (MLA) with Shanghai based Mak Brands Limited concerning the proliferation of the Donut King franchise system within China.
The Agreement is performance based for an initial term of 20 years, and growth in the Chinese marketplace is based on operating a minimum 20 stores within five years and increasing this figure by at least eight per annum from then on.
RFG Chairman John Cowley considers the move a major event for the company. “The MLA represents a significant event for RFG as a Listed company in that it is the first to contemplate expansion of the Donut King system beyond Australia’s borders,” he said.
“The MLA also represents the realisation of the last of the seven strategic growth drivers identified in RFG’s May 2006 Prospectus, further confirming the Company’s resolve and ability to deliver sustained value for shareholders and other stakeholders”.
RFG CEO, Tony Alford, added that overseas growth is a key part of the growth strategy for their four franchises - Donut King, BB’s Cafe, Brumby’s Bakeries and Michel’s Patisserie. “The international expansion and commercialisation of RFG’s Donut King, BB’s Café, Brumby’s Bakeries and Michel’s Patisserie franchise systems had always been high on RFG’s agenda given our view that each possess significant potential for foreign market application,” he advised. “However, the Company has historically been unwilling to licence its systems, and risk dilution of brand value, unless it was able to partner with a robust licensee capable of applying sufficient resources, franchising expertise and resolve to ensuring the success of such a venture. Mak Brands satisfies each of these pre-requisites.”
