KUALA LUMPUR- Home-grown nightlife brand The Butter Factory is taking back the name and branding rights from its franchisee in Kuala Lumpur.
The group announced yesterday that it has terminated its franchise agreement with Malaysian operator JV Entertainment - which has been running The Butter Factory KL since August 2012 - due to "numerous" contractual breaches by JV Entertainment.
The Butter Factory's executive chairman Tay Eu-Yen tells Life! that the breaches included violations of a non-competition clause when JV Entertainment promoted another club and The Butter Factory Group's branding standards. JV Entertainment also defaulted on payment over the past six months.
Without delving into details, she acknowledged that there were also issues over the KL club's branding and marketing strategy, which she felt "impaired The Butter Factory's reputation".
She did not say how much money was owed to her company.
JV Entertainment, led by executive chairman Victor Hoo, signed a three-year franchise agreement with The Butter Factory in 2012 and started the KL club in August that year.
Located in Jalan Kia Peng, the 10,000-sq ft, two-storey nightclub, which was set up at a cost of $2.45 million, quickly became a destination nightspot in Kuala Lumpur.
It was the first franchise outlet started by The Butter Factory Group, which currently runs its nightclub at One Fullerton and Sauce Bar at the Esplanade.