KLE sprinting to more continents with UBTR
Published:Tuesday | September 25, 2018 | 12:00 AM
The first Tracks & Records franchise to open on foreign soil is set to launch on October 10 in London, with 14 more to be rolled out in the United Kingdom over five years.
KLE Group is already looking to finalise more franchise deals on other continents in pursuit of an international market for the casual dining chain, which leverages the stardom of sprint celebrity Usain Bolt, through its franchising arm FranJam.
"We have different prospects at different stages of the process," said Managing Director of FranJam and CEO of KLE Group, Gary Matalon. "It could be South Florida, or depending on how things go, it could be Australia or Japan."
The UK franchise, for which the deal was struck a year ago, will be operated by the SME Group. The company, which was set up in 1982, already operates KFC, Pizza Hut, Home Delivery, Costa Coffee and Warren's Bakery franchises, as well as hotels. It's headed by CEO Aly Esmail.
SME had planned initially to use a vehicle called Casual Dining Restaurants Group to hold and operate the Jamaican franchise, but later changed course.
"They decided instead to use the SME Group directly," said Matalon "There was another group with a similar name and to avoid confusion they just used SME. But it is the same persons."
With the franchising plan now gaining steam, the business line will bring in additional earnings for KLE, which made flat profits of $5.05 million from $58.7 million of revenue in the June quarter.
The royalties earned from the Tracks & Records franchise will flow to FranJam Limited, which is owned 49 per cent by KLE Group.
"There is a standard fee to secure territory, and once the location opens, then there is a royalty on revenue," said Matalon, who declined to give details on the deal. "When there is a dividend or profits from FranJam, half will go to KLE," he said.
The other 51 per cent of FranJam is owned by Downsound Records CEO Joe Bogdanovich, who acquired the stake in 2016 from KLE as settlement of a US$650,000 debt owed to him by the entertainment company.
Tracks & Records, a Jamaican-themed restaurant, which launched with eight-time Olympic gold medallist Usain Bolt as a partner, started operations in Kingston, Jamaica, in April 2011.
There are currently three UBTR locations in Kingston, Ocho Rios and Montego Bay.