10 February 2015 – The Rakyat Post
After burning through about RM185 million in less than four years, the Burger King franchise in Malaysia and Singapore is getting a white knight in the form of Brahim’s Holdings Bhd.
In a circular filed with Bursa today, Brahim’s said it had roped in former QSR Brands (M) Holdings Sdn Bhd managing director Datuk Ahmad Zaki Zahid to manage the Burger King franchise – aiming to tap his experience in previously running KFC and Pizza Hut outlets in Malaysia, Brunei, Cambodia, Singapore and India.
However, the circular doesn’t mention how much Brahim’s will be pumping into Burger King to revive the franchise – with plans that include selective expansion of new outlets and refurbishment of existing ones – 49 in Malaysia and 38 in Singapore.
The franchise vendor, Ekuiti Nasional Bhd (Ekuinas), had pumped in around RM58 million since it bought the Burger King franchise in 2011 for RM68.2 million – RM39.5 million in the form of loans, which were later converted into shares in the Malaysian franchise holder and another RM5 million and S$5 million (RM13.1 million) cash injection.
The deal is being positioned as a 80:20 joint venture between Brahim’s and Ahmad Zaki’s Quantum Angel Sdn Bhd valued at RM95 million, which will be up for Brahim’s shareholders’ approval on Feb 25.
Should Brahim’s shareholder not give their approval, the deal will lapse on March 31 this year if an extension is not obtained from Ekuinas and the Burger King master franchise holder from the US.
Key terms of the deal include Brahim’s not being allowed to close any existing outlets with the master franchiser’s prior approval.
Brahim’s will also have to pay US$25,000 (RM89,900) each to the master franchiser to get a 20-year licence to operate the outlets under the Burger King name.
A non-competitive clause whereby Brahim’s cannot operate for two years any “McDonald’s franchise business” is also part of the deal. Excluded are existing food franchises and pizza outlets already being operated by the buyers.