Chatime dispute a wake-up call: MFA

especially master franchisees, should consult legal advisers before and during the commencement of business to understand the franchise agreement, and not seek legal advice only when things have turned sour.

“The language in the (franchise) agreement is not ordinary language. You may understand the language but you may not be able to foresee the consequences. There are a lot of details to be aware of. Franchisees should equip themselves before embarking on the franchise business. Franchisees must not get lured by the external look of the franchise brand and fashion, because they’re going in for a long-term relationship,” said Latip.

Loob, which is expected to unveil its new brand of tea stores by March 6, has lodged a police report against brand owner La Kaffa and is committed to keeping its 165 outlets in Malaysia open. The dispute between Loob and the franchisor came out in the open following La Kaffa’s announcement early last month that it had terminated the franchise and would immediately take over all the 165 Chatime outlets in the country.

A Chatime Publika franchisee said he will continue with Loob’s new brand of tea stores as he has faith in its CEO, Bryan Loo.

“We’ve been doing business with Loob for the past six years. That is proof of the success that he (Loo) has done with Chatime and the other brands that he has. I would have more confidence in Loo than in the franchisor (La Kaffa).

“I don’t know what type of support they will provide. Will they be running it from Taiwan? We have no idea,” the franchisee said, adding that La Kaffa has yet to contact him.