IP Ventures to invest $25M in coffee firm

Investment holding firm IP Ventures Inc. will be investing at least $25 million to expand its Internet cafe network, as part of its franchising agreement with Vietnam’s Viet Thai International Joint Stock (VTI).

The letter of intent signed Oct. 26 granted IP Ventures franchising rights for VTI’s Highlands Coffee brand, including use of the trademark, brand, and “Highlands Coffee” trade name.

The agreement likewise included rights to use the technology and systems involved in operating shops offering Highlands Coffee products.

In exchange, the franchising deal required IP Ventures to source coffee and other coffee-related products from VTI. The agreement also came with a commitment from IP Ventures to invest at least $25 million to roll out at least 200 new Internet cafe outlets that would carry the Highlands Coffee brand.

The deal also left doors open for other possible partnerships between IP Ventures and VTI.

“The parties hereby agree to collaborate on other strategic partnerships, whether in the Philippines or Vietnam, that would involve the addition or enhancement of products and services in either country,” the letter of intent stated.

While the agreement, signed by IP Ventures president Jaime Enrique Gonzalez and VTI commercial director Dan Thai, was non-binding, it contained all the points to be included in the definitive agreements, which would be negotiated and executed within the next 30 days.

The signed letter of intent would serve as the framework for the development and execution of the franchising agreement and area developer agreement.

IP Ventures is a private holding company with subsidiaries operating in the information technology and IT-enabled services space.

It owns the country’s largest network of Internet cafes through Digital Paradise Inc., which operates the Netopia chain. IP Ventures subsidiary IP E-Game Ventures Inc. has 75-percent shareholdings in Digital Paradise, following a deal with the Philippine Long Distance Telephone Co. late last year.

VTI, on the other hand, has a portfolio of company-owned and licensed brands.

Aside from Highlands Coffee, the company is also the exclusive license developer for Hard Rock Cafe in Vietnam, Hong Kong, Macau, and Southern China, as well as represents lifestyle brands Aldo, Debenhams, Emporio Armani, and Swarovski in Vietnam.

Jollibee Foods Corp. has acquired a 49-percent stake in VTI’s Vietnam unit and a 60-percent share in its Hong Kong unit.