WHL - Woolworths Holdings Limited - Woolworths local franchise business
Woolworths Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1929/001986/06
Share code: WHL
WOOLWORTHS LOCAL FRANCHISE BUSINESS
Woolworths today commenced discussions with their South African franchisees
about the future of Woolworths local franchise business. After informing
franchisees that it would be stopping its local South African franchise
business, Woolworths offered to buy all local franchises at fair value.
"Our franchisees have made a valuable and significant contribution to the
Woolworths business for many years," said Simon Susman, Chief executive officer
of Woolworths. "However, after an extensive strategic review of the franchise
business, we have come to the conclusion that it is no longer in the best
interests of Woolworths for us to operate a local, franchise business and we
will stop franchise operations in South Africa."
Woolworths is offering to buy all local franchise stores at fair value, as
Susman explained, "We are committed to an honourable and reasonable settlement
with all local franchisees and are offering to buy stores at fair value. This
means that despite fixed term franchise contracts, Woolworths will value the
businesses as going concerns."
The franchisees and Woolworths have commenced discussions to agree guiding
principles for valuation. Once these principles are agreed, Woolworths final
offers to buy will be in place until they expire on 30 June 2011. The total
value of this investment, if all the offers made to the franchisees were
accepted, would not be material.
Upon the sale of any franchise business to Woolworths, Woolworths have committed
to employing all franchise store managers and staff.
Woolworths noted that the key factors in reaching the decision to stop
franchising were that it had become increasingly more complex and expensive to
operate a separate franchise business model with its own systems and processes.
Woolworths press office on 021 407 7700
2 September 2010
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 02/09/2010 14:47:16 Produced by the JSE SENS Department.
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