Restaurant Brands New Zealand Ltd. said Sept. 3 that it is not renewing its license agreement with Starbucks Corp. and instead is selling its fixed assets and stock of the local coffee business to New Zealand-based Tahua Capital Ltd. for NZ$4.4 million.
The restaurant operator's decision to exit the Starbucks business in New Zealand after 20 years comes ahead of the October expiration of its license deal with the Seattle-based coffee giant.
Restaurant Brands, which operates 22 Starbucks stores in the country, said the planned sale is in line with its strategy to focus on its core quick-service restaurant brands for growth. Chairman Ted van Arkel said in a statement that the Starbucks business was becoming less relevant to the company’s overall direction.
The company currently also has franchising agreements with Yum! Brands Inc.'s KFC and Taco Bell, and CKE Restaurants Holdings Inc.'s Carl's Jr. In June, Restaurant Brands signed a franchise agreement for Pizza Hut, another Yum! Brands-owned restaurant chain.
Tahua Capital was established specifically to acquire the Starbucks New Zealand business, Restaurant Brands said. Radio New Zealand reported Sept. 3 that Tahua Capital is owned by coffee shop operator Maestro Cafes and two investment firms.
Tahua Capital will enter a new license agreement with Starbucks and plans to refurbish existing stores and also open new ones. It intends to retain the 300 existing Starbucks New Zealand employees on the same terms and conditions they had under Restaurant Brands.
The transaction is expected to be completed in late October.
Restaurant Brands expects the sale to have a minor adverse impact of approximately NZ$1.3 million on its current year net profit since the Starbucks business contributes less than 4% of the company's total sales and concept EBITDA.
As of Aug. 31, US$1 was equivalent to NZ$1.51.