Envictus sells 'loss-making' Texas Chicken in Indonesia to focus on Malaysia

Food and beverage group, Envictus International Holdings has sold the operations of Texas Chicken in Indonesia for approximately IDR31.2 billion (RM9.3 million). The company aims to dispose the "loss-making" business to focus on its Texas Chicken operations in Malaysia, said a letter to investors seen by Marketing Interactive.

Quick Service Restaurant, a wholly-owned Indonesian subsidiary of Envictus International, has inked the agreement with Quick Serve Indonesia, which is the franchisee of Texas Chicken in Surabaya. The deal comprises all six Texas Chicken outlets located in Jakarta and West Java, including all the fixtures, fittings, and kitchen equipment.

According to Envictus International group CEO Khor Sin Kok, the Texas Chicken operations in Indonesia have been loss-making since the commencement of business in September 2018 with accumulated losses of approximately IDR15.3 billion (RM4.5 million). Malaysia, on the other hand, is starting to show a positive bottom line.

Envictus International currently operates over 50 Texas Chicken restaurants in Malaysia and has opened five new restaurants in this year alone. One of it includes its new 24-hour outlet at Shell Sunway Mentari, which has a drive-thru that is the first in the Klang Valley and second in Malaysia.

The transfer of ownership is set to complete in six months, by March 2020. However, under the agreement, Quick Serve Indonesia will bear the cost of operations from 1 October 2019 onwards. Net proceeds from the deal will be used for "general working capital purposes" of Envictus International.

Quick Serve Indonesia has also agreed to offer employment to all existing employees on the same terms and conditions as the existing employment contract and be responsible for their payroll. If any offer of employment is rejected, it will terminate the employment contract and bear the costs of any labour claims.

Earlier in May, Texas Chicken made Indonesia the first stop of its new brand positioning reveal across the globe. A new logo, international menu, and store design sporting the “Blaze” image was launched in a new concept restaurant situated in central Bandung. According to a press release, the new outlet is part of a much larger franchise development deal that will bring 80 Texas Chicken restaurants to Indonesia over the next 10 years.