Jubilant Foodworks will not back down

Jubilant Foodworks’ board on Monday did not renew its development rights for US-based coffee and donut brand Dunkin’, the company said in a stock exchange filing.

Jubilant said it would close all Dunkin’ stores in the country on or before December 31.

Jubilant Foodworks entered into a Multiple Unit Development Franchise Agreement (MUDFA) on February 24, 2011, to develop and operate Dunkin’ stores in India.

Under the agreement, development rights are valid until December 31, 2026, the filing said.

“In accordance with the overall strategic assessment undertaken by the Company, the Board of Directors at its meeting held on Monday, inter alia, considered and approved the non-renewal on the expiry of the current term of the development rights granted in Madfa in respect of Dunkin’ Brands,” the company said.

It added, “As a result of the above, the Company will, in a systematic and phased manner, evaluate and take such actions as it may deem appropriate with respect to its existing Dunkin’ operations. These may include, in consultation with the Brand Owner and in accordance with the terms of the MADAFA, applicable laws, regulatory requirements and contractual obligations, rationalizing and/or discontinuing certain operations, the sale, transfer or disposition of assets, and/or the assignment or transfer of franchise rights.”

The company said the move will not impact its operations or financial position.

Dunkin’s revenue in FY2015 was ₹37.24 crore, contributing 0.61 per cent to Jubilant Foodworks’ revenue. The brand had reported a loss of ₹19.13 crore in the last financial year.

Its total store count at the end of the October-December quarter stood at 27.

According to its earnings presentation, the company has already closed seven stores in the last 12 months.