What Happened
Franchising · Malaysia · Taiwan · Markets · Business reportKuala Lumpur and Taipei · event of 20 April 2026
Settled with no admission of liability — the Federal Court never ruled
43 Days to Rebrand. 538 Days to a Ruling.
On 5 January 2017 Taipei-listed La Kaffa International terminated the Chatime master franchise held by Malaysia's Loob Holding. Forty-three days later Loob had renamed 161 of its 165 outlets to Tealive, for what its chief executive put at under RM10 million. Four shops kept the old sign. The Kuala Lumpur High Court refused to stop it; the Court of Appeal reversed that and granted the injunction — 538 days after the termination, by which point the thing an injunction would have prevented had been done and undoing it meant closing 161 shops and about 800 jobs. Sixty-three days after winning, La Kaffa settled, expressly with no admission of liability by either side, and the Federal Court never ruled. Tealive went on to 831 Malaysian outlets. And in April 2026 it shelved its stock-market listing for the second time, with revenue falling for the first time in five years.
- 43days from termination to 161 shops renamed
- 538days until the appeal court ordered it stopped
- 161 / 165outlets rebranded — 97.6% of the estate
- 58.43%fall in the franchisee's net profit, FY2025
- 2.82×dividends against that year's profit
What is documented court orders and company filings, graded by standing
| Standing | What happened | Where it comes from |
|---|---|---|
| Confirmed | La Kaffa terminates Loob's Chatime master franchise, 5 January 2017 | Reported the same month by Malaysian and Taiwanese press |
| Confirmed | 161 of 165 outlets renamed Tealive, announced 17 February 2017, at a cost the chief executive put under RM10 million | Three outlets reported it the same day, quoting the figure directly |
| Confirmed | Will Group appointed the new Malaysian master licensor, 6 March 2017; four Chatime outlets remain | Announced by La Kaffa and reported by two outlets that day |
| Confirmed | The Court of Appeal reverses the High Court and grants the injunction, 27 June 2018; Justice Hamid Sultan Abu Backer; 161 outlets and about 800 staff at risk | The judgment was delivered in open court and reported the same day; the ground given was breach of post-franchise terms and return of properties |
| Confirmed | A stay of execution is refused, 5 July 2018; Loob files in the Federal Court | Reported by two outlets on the day |
| Confirmed | Settlement executed 29 August 2018 and announced the next day: every Malaysian proceeding and the Singapore arbitration withdrawn, and no admission of any allegation or liability by either party | A joint statement, carried by three outlets. The Federal Court therefore never ruled. |
| Confirmed | Loob's revenue falls to RM489.99 million in the year to 30 June 2025, from RM591.24 million; net profit RM21.46 million against RM51.62 million; the listing is shelved in April 2026 | Filed financials reported by three outlets, with the chief executive quoted confirming the decision |
| Confirmed, not verifiable here | The Kuala Lumpur High Court refuses the same injunction in May 2017, so Tealive keeps trading — the day is not established | Every report reached dates it only as “May last year”, counted back from the 2018 coverage |
| Not public | What the settlement cost, and who paid whom | The terms beyond the joint statement are confidential. Any figure is speculation, including in the places where one has been guessed. |
| Not established | How many Chatime outlets Malaysia has today | Coverage of Will Group’s expansion runs to 2019 and stops. The restart figure of four, in March 2017, is the last one this report can stand behind. |
What each side accused the other of, and none of it was adjudicated a separate table on purpose — the case settled, so these were never tested
| Asserted by | The allegation | Standing |
|---|---|---|
| La Kaffa | Loob sourced raw materials from unauthorised third parties, and owed US$644,536.32 (RM2.866 million) | Pleaded and reported; never adjudicated |
| Loob | The sourcing was localisation with named brands, and every ingredient was halal-certified | Asserted in interviews; never adjudicated |
| Loob | Malaysia was about 50% of Chatime’s global revenue | A party to the dispute. Irreconcilable with the next row. |
| La Kaffa | Malaysia was about 5% of group revenue | The other party to the same dispute. A tenfold gap, and no way to close it. |
Timeline
Nine years, in order the 43-day window is the whole dispute; everything after it is aftermath
- 5 Jan 2017La Kaffa terminates the Chatime master franchise held by Loob Holding
- 17 Feb 2017161 of 165 outlets are Tealive, 43 days later, for under RM10 million. The stated goal: 250 outlets by 2018, and 5 million customers a month against 2.5 million
- 6 Mar 2017Will Group becomes the new Malaysian master licensor. Chatime restarts from four shops
- May 2017The High Court refuses the injunction: damages are an adequate remedy, and the balance of convenience favours 161 shops and their staff. The day is not established.
- 27 Jun 2018The Court of Appeal reverses and grants it — 538 days after the termination. On the reporting’s own figures, compliance means closing 161 shops and about 800 jobs
- 5 Jul 2018A stay is refused. Loob files in the Federal Court
- 29 Aug 2018Settled, 63 days after La Kaffa won. Both proceedings withdrawn, no admission by either side, the rest confidential. The Federal Court never ruled
- early 2024ZUS Coffee passes Starbucks as Malaysia’s largest coffee chain, 743 outlets to 320 — a competitor in a category neither 2017 litigant was fighting over
- 5 Jun 2025Loob files a draft prospectus: 58,459,500 new shares and 292,297,400 existing ones, which work out at 5% and 25% of the enlarged capital
- Apr 2026The listing is shelved a second time, 319 days after the filing, with revenue down for the first time in five years
The Argument
The remedy arrived after the facts 43 days against 538 — the arithmetic is the argument
The whole dispute turns on a 43-day window. In it, an operator who held the leases, the staff and the local supply relationships replaced a brand across 161 shops for under RM10 million. The court that could have prohibited that ruled on it 538 days after the termination — and by then prohibiting it meant something entirely different from preventing it. The High Court had said as much when it refused the first injunction: damages were an adequate remedy, and the balance of convenience lay with 161 shops and their staff. The Court of Appeal disagreed on the law and granted the order anyway, grounding it in breach of post-franchise terms and the return of properties. Both courts can be right, because they were answering different questions. What the sequence shows is narrower and harder to argue with: an injunction is a remedy against something not yet done, and in a franchise network of that size the doing takes six weeks while the appellate answer takes eighteen months. Sixty-three days after winning, the licensor settled. Nothing in the record says why, and the terms are confidential — but a party that has just obtained the order it asked for does not usually give it up, and the order it had obtained was one that would have closed 161 shops.
- 538 vs 43Days to an appellate answer, against days to make it moot
- 63 daysBetween winning the injunction and settling it away, with no admission on either side
Whoever holds the shops holds the business and the two sides cannot agree, tenfold, on how big that business was
A master franchise splits a business in two: the licensor owns the name, the system and the supply specification; the operator owns the leases, the staff, the local suppliers and the customers. For as long as the contract holds, that division is invisible. When it ends, each side keeps what it actually held — and here that meant the licensor kept the name and four shops, while the operator kept everything else and put a new name on it in six weeks. That is not a loophole; it is the structure working exactly as written. The lesson the case is taught for is the drafting one, and it is real: the express post-termination restraint in the agreement is what the Court of Appeal eventually relied on, alongside the Franchise Act 1998 — the Akta Francais 1998 — rather than on any implied protection. But the sharper point is commercial. The two parties have never agreed on how much of Chatime Malaysia was, and the gap is tenfold. Loob’s founder has put Malaysia at about half of global revenue; La Kaffa, after the split, told reporters it was about 5% of group revenue, and its chairman said he hoped Will Group would grow it to about 10%. Those figures cannot all be true. What they show is that a licensor and its largest operator can run the same network for seven years without a shared account of its size — which is a fair description of how a relationship reaches the point of being terminated by hand-delivered notice.
What Others Add
The winner of 2017, as filed in 2025 figures from the listing attempt and the year that ended it
| FY2024 | FY2025 | Change | |
|---|---|---|---|
| Revenue | RM591.24m | RM489.99m | −17.13% |
| Net profit | RM51.62m | RM21.46m | −58.43% |
| Net margin | 8.73% | 4.38% | 18% in FY2021 |
| Dividends declared | — | RM60.56m | 2.82× the profit |
Two things in that table are worth separating. The revenue fall is the first in five years and the margin compression is the trend — 18% in FY2021, 8.73% in FY2024, 4.38% in FY2025 — which is a business whose costs and competition are both rising. The dividend is the anomaly: RM60.56 million declared against RM21.46 million earned, 2.82 times cover in reverse, in the year the listing was pulled. No source reached for this report explains it, and it is stated here without an explanation rather than with a guessed one. At the point the prospectus was filed the group ran 831 Tealive outlets in Malaysia (547 its own, 284 franchised), 135 Bask Bear coffee shops, and 121 franchised Tealive outlets abroad, across the Philippines, Myanmar, Brunei, Mauritius, Vietnam, Cambodia and Canada — 1,087 in total. Creador, a Malaysian private equity firm, holds 30%; the founding family holds 59.1%.
The market that arrived after the case closed none of these three was a factor in 2017; all three are now
ZUS Coffee
Coffee, not tea
- 743 outlets against Starbucks’ 320 — 2.32 times over, in a market Starbucks had held for three decades
- Targets more than 1,300 outlets by the end of 2026, with about 200 new Southeast Asian stores planned for 2025
- Tealive competes here too, through Bask Bear — 135 shops at the prospectus
Mixue
Scale and price
- Over 1,000 outlets across Vietnam, Thailand, the Philippines, Singapore, Malaysia and Indonesia
- Over 2,900 staff in Malaysia alone, on its own account
- Competes at a price point neither 2017 litigant was built for
Chagee
Positioning, and a certificate
- In December 2025 it became the first freshly-made tea brand in Malaysia certified under the health ministry’s Healthier Dining Programme
- That certification caps a drink at 5g of sugar per 100ml — competition on a health claim, not on price
- A third axis again: not price, not coffee, but what the drink is said to be
And the licensor, nine years on recovering — but not in Malaysia
- Chatime runs about 1,400 outlets across 63 countries and territories, on company-supplied figures relayed by trade press. Indonesia is the largest market at 420 — 30% of the network — then the Philippines at 180, Australia at 168 and Canada at 133.
- Its Indonesian master franchisee has extended for 15 years and committed to 300 more outlets. That is where the recovery is coming from.
- January 2026 group revenue was NT$423 million, up 31.59% year on year and a six-year monthly high; March 2026 was NT$460 million. A year earlier, on 6 January 2025, it had agreed to buy the Taiwanese chain Hanlin Tea Room — founded in Tainan in 1986, about 40 outlets — for NT$272 million at NT$68 a share, consolidating it from that March. That acquisition is one of the reasons the January 2026 figure is a record.
- How many Chatime shops Malaysia has today could not be established. Reporting on Will Group’s expansion runs to 2019 and stops. The last figure this report can stand behind is the four it restarted from in March 2017.
Conclusion
So what what nine years of this actually settled, and what to hold loosely
The settlement decided nothing about who was right.
This is the first thing to hold on to, because it is the easiest to get wrong. The joint statement records expressly that neither party admitted any allegation or liability, and the Federal Court never ruled. The Court of Appeal did find for the licensor — on breach of post-franchise terms and the return of properties — but that order was settled away 63 days later and its terms are confidential. Every accusation in this dispute, on both sides, remains an accusation.
Write the post-termination clause. The statute will not write it for you.
The reason this case is taught is narrow and useful. What the Court of Appeal eventually relied on was the agreement’s own express restraint, alongside the Franchise Act 1998 — not an implied protection read into the contract by the statute. If a franchise agreement is silent on post-termination competition and the return of confidential material, the silence is the term.
Winning the market is not the end of the story.
The operator kept the shops and grew to 831 of them; the licensor restarted from four. Nine years later the operator’s revenue has fallen for the first time in five years, its margin has gone 18% to 8.73% to 4.38%, and its listing has been shelved twice — while the licensor posted a six-year monthly revenue high in January 2026. But read that comparison carefully: the licensor’s recovery is Indonesian volume and Taiwanese acquisition, not a Malaysian comeback, and how many Chatime shops Malaysia has today could not be established at all. Neither company has won Malaysia. What has changed there is who else is in it.
Hold loosely: the dividend, and both revenue-share figures.
RM60.56 million distributed against RM21.46 million earned is the single most striking number in this record, and no source reached for this report explains it. It is stated because it is reported; it is not interpreted, because interpreting it would be invention. Equally, neither 50% nor 5% should be repeated as fact: they are the two parties’ own accounts of the same market, a tenfold apart, and nothing reached here can adjudicate between them.