Gloria Jean’s Coffee in Malaysia - Scenario - Business Assignment Help

Assignment Task

The history and background

It was in the year 1979, Ed and Gloria Jean Kvetko first started Gloria Jean’s Coffee (GJC) in Chicago, the USA. A total of 25 years and 316 outlets worldwide later, Diedrich Coffee, the owner of GJC decided to sell the GJC franchise. Many offers were made, but the deal went to Nabi Saleh, GJC’s Master Franchisee in Australia. For a cool $16 million, Saleh managed to own the rights to all GJC worldwide minus 146 outlets in the USA and Puerto Rico. Where Dierich Coffee owns the rights to operate free of franchise royalty.

In 2010, Dierich sold all of its rights and remaining 102 franchised outlets across 24 states in the USA to Saleh for additional $3.1 million, making Saleh as the owner of GJC franchise worldwide. GJC ranks third globally among premium coffee brands. Saleh had to look into many issues after taking over the GJC franchise. But he loved every second of it. He had to make sure all of the operations worldwide were within his view and was all right. Among many other important matters that he had to look into was the renewing of Malaysia’s Master Franchisee Agreement.

The first Malaysian master franchisee

In 1996, prior to Saleh’s taking over of GJC, the Malaysian Master Franchisee Agreement was signed with Tai Thong Group (TTG) of Restaurants Sdn Bhd, a huge Malaysian F&B company, with a tenure of ten years which covers Malaysia, Thailand, Singapore and Brunei. TTG owned many predominantly Chinese chain restaurants in Malaysia and overseas. One of the well-established Chinese restaurant chains in Malaysia is the Four Seasons Restaurant which focuses and target mainly on the Malaysian Chinese segment.

TTG later catered to a larger market segment by venturing into western food and brand name such as Seafood Restaurant, Room Eighteen, Santini Ristorante Italiano, Royal Thai, Palms Cafe & Bistro, 798 Wine Bar and 798 Sports & Wine Bar, adding more firepower to their already massive arsenal. TTG operated its first GJC outlet in KLCC and moved on until the total number rose up to 13 outlets by the year 2000. TTG established most of its GJC outlets in the Klang Valley area, selecting the most metropolitan area in Malaysia aside from Penang and Johor Bahru.

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