Global coffee chain Gloria Jean’s will close up to 25 of its 400 Australian outlets by the end of March as it quits corporate-run stores and becomes a franchise-only business

February 24, 2014 Leave a comment

Michael Bleby Reporter

Gloria Jean’s to close 25 outlets in switch to franchise-only model

Published 17 February 2014 11:10, Updated 17 February 2014 11:58

Global coffee chain Gloria Jean’s will close up to 25 of its 400 Australian outlets by the end of March as it quits corporate-run stores and becomes a franchise-only business.

The coffee chain’s move comes after it was acquired in December by ­Singapore-listed Global Yellow Pages, a database and directories company that is expanding into food and beverage and wants to expand the Gloria Jean’s brand into China. It already exists in ­39 countries.

The planned expansion of the coffee chain that has about 800 stores throughout the world means it can no longer focus on owning and running stores, executive ­chairman and ­co-founder Nabi Saleh said.

“Owning retail property ourselves is a distraction from our primary ­business strategy,” Saleh told The Australian Financial Review.

“By March 31 our goal is to either have all these coffee houses ­successfully franchised or closed.”

Gloria Jean’s has corporate-run stores in five Australian states.

The company says it is too early to say which stores would be closed or how many stores could be converted into franchises.

“We are currently in talks with a number of potential franchise partners some of which are already deep into the training process,” Saleh says.

Under the cash-and-shares deal, for which GYP raised $S62.9 million ($55.3 million), the company took ­control of all Gloria Jean’s Coffees and It’s A Grind intellectual property, the global supply chain operations, and the master ­franchisor business for all ­Gloria Jean’s Coffees coffee houses throughout the world.

Saleh, the non-executive ­chairman of the newly formed ­GYP-owned holding company for the Gloria Jean’s business, retains interests in the master franchisee business of ­Australia, USA and China.

 

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