CoolBrands International has approved the sale of most of its franchising division to International Franchise Corp for US$8m. Definitive agreements in respect of the transaction are expected to be completed, and the transaction closed, prior to the end of this month, the company said.
The portion of the franchise division being sold operates, by franchising and licensing, retail outlets serving primarily frozen yogurt and ice cream under the Bresler’s, I Can’t Believe It’s Yogurt, Ice Cream Churn, Swensen’s, and Yogen Fruz trademarks. Following closing of the transaction, CoolBrands will continue to operate as franchisor of retail outlets under the Jerry Tucci’s Pizza Pasta and Tropicana Smoothies trademarks.
“The sale of the franchising division will allow CoolBrands to focus its resources in its pre-packaged consumer products division, yogurt division, foodservice division and dairy components division,” the company said in a statement.
A portion of the proceeds from the sale will be used to repay short term borrowings and the balance will be used for general working capital requirements of CoolBrands.
International Franchise Corp is a company controlled by Aaron Serruya, a director of CoolBrands and the senior executive responsible for the franchising division at CoolBrands.
“Divesting our franchise business will enhance the company’s ability to implement its plans and strategies in its core business segments,” said David J. Stein, president, CEO and co-chairman of CoolBrands International Inc. “We believe that International Franchise Corp., under the leadership of Aaron Serruya, is committed to providing the focus, energy and imagination to help move the franchise system forward in the years to come.”
Serruya will remain on the board of directors of CoolBrands, but following completion of the transaction will no longer be an executive officer of CoolBrands.