Leading Australian retailer Donut King will take on the lucrative Chinese marketplace after the chain’s owner, Retail Food Group (RFG), entered into a master licence agreement with Shanghai-based Mak Brands Ltd.
A partner at McCullough Robertson, David Downie, who penned the master licence agreement for RFG, said the transaction would see an iconic Australian brand establish itself within the international marketplace.
“The master licence agreement grants exclusive rights to Mak Brands to establish and expand the Donut King chain throughout Mainland China and will generate revenue in the form of an initial licence fee and ongoing royalties,” Downie said.
“As part of the agreement there is a minimum requirement to establish 140 outlets in Mainland China within the first 20 years, which highlights the growing attraction of Western brands to the retail market in Mainland China.
“Drafting the agreement was complex due to various factors including the fact the licensee will be carrying on business in China,” he said.
Downie said the intellectual property team drew on its past dealings with the buoyant Chinese market to establish the agreement.
“We have significant experience in transactions involving Chinese partners and so were well placed to work on this transaction and see it through to its successful completion.”
Donut King began in Australia in 1981 and currently has over 300 stores throughout Australia. RFG is also the franchisor behind bb’s cafe, Brumby’s Bakeries and Michel’s Patisserie.
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