Franchisor

1.    What is the company’s current financial status?

Oldtown company current financial status is stable. Oldtown's financial year ending Dec 31, 2012 (FY12) and FY13 net profit of RM43.9mil and RM51.7mil respectively. This will see earnings growing at 9.3% and 17.7% respectively. We believe our estimate is achievable at this point in time, as key drivers are going strong. The main drivers are the strong double-digit growth rate in the fast-moving consumer goods (FMCG) segment coupled with a moderate growth in the company's caf chains.

The FMCG growth expects to be boosted by the continuation of likely rising market shares in Malaysia, Hong Kong and Singapore this year.

It will also be boosted by penetration into new markets such as South Korea and Vietnam. Meanwhile, the management's vision of opening more caf outlets domestically and regionally should be more than adequate to sustain the moderate growth rate in the segment that we are conservatively forecasting for now.

Our target price of RM1.58 is based on 12 times the price earnings ratio over its FY12 earnings per share of 13.2 sen. Investors should continue to buy the stock at market as it still offers potentially strong total returns of 27.5% at the current price.

If the economic condition normalises with China continuing its growth trajectory, we believe there could be more upsides to our FY13 estimates.

We have observed that foreign and local funds have started to increase their stakes in the stock recently at 18.6% as at Feb 23, 2012. We understand that the promoters (management and major shareholders) will no longer sell their shares in the open market. This could be a positive indication of the company's future earnings growth.

2.    Who are the competitors?

Oldtown competitors are Starbuck, Paparich, and Coffee Bean.

3.    What is my total estimated cost to open?

            The minimum financial requirements and application procedures are as follow: -

1.              Minimum net worth of assets of RM1 million.

2.              Minimum liquidity of RM600, 000 (in cash or cash equivalents)

3.              Accept individual applications from qualified prospective Franchisees.

4.              Individual applications must be submitted for each person who will have an                 ownership interest in the franchise.

5.              Individual applications are also required of corporate applications for each                  owner with an interest of 10% or more. Additional supporting for                          creditworthiness, annual reports, etc. is required.

6.              Franchisees may be invited to attend a Franchise Seminar for a more detailed              understanding of the OldTown White Coffee Business Model.

4.    What is the Franchisor mission?

Oldtown Group mission is focus on OUR PEOPLE, CUMMUNITY, OUR PEOPLE, MOTHER EARTH and INVESTORS.

1. OUR PEOPLE:

We Believe That Our People Are Our Assets

We acknowledge and appreciate our people as those who grow with us and for their full dedication. We value them for their effort and what they are able to bring to the company, hence we constantly provide a platform and opportunities for career growth and enrichment of knowledge. We cultivate the passion of delighting our consumers into all our staffs to bring forth the best experience possible.

2. COMMUNITY:

We Nurture The Community

We are aware and committed to our community hence we operate our business in a manner that does not compromise the wellness of our future generations. We are passionate about our corporate responsibilities and do our best to provide for the community in different ways, from doing our part for the earth we live in to providing underprivileged children with better homes. We will not look lightly upon our social responsibilities, as we believe in giving back to the community as part of the effort towards a better future.

3. OUR CONSUMERS:

We Delight Our Consumers With Our Products

We are consumer centric and are always focused on consumer needs. Hence we are dedicated to delighting our consumers with all our product offerings, by committing ourselves in sourcing the finest ingredients through ethical ways to provide them with the best quality products. We hold strongly to our origins in order to bring to consumers the authentic experience that they expect to enjoy.

4. MOTHER EARTH:

We Do Our Part in Saving Mother Earth

We are attuned with the growing needs to nurture our mother earth and to do our part in caring for the environment. With this, we share and grow the passion and knowledge of caring for the environment with our partners and consumers for them to live this together with us as part of our corporate values.

5. INVESTORS:

We Focus on Prospering Our Investors

We are dedicated to growing and maximising the financial rewards of our investors as we see it as a platform for our company to continue to provide to our consumers and the community.

5.    How many franchised units (stores or outlets) now?

Number of outlets is 207 (Latest Update on July 2012)

6.    What are the strategies marketing of Franchisor?

We utilize the following marketing strategies to sustain and expand our business:-

·          Continue to place emphasis on branding by strengthening and promoting the “OLDTOWN” brand name which is key in building brand equity and customer loyalty;

·          Position ourselves as an operator of a major café chain specializing in coffee supported by in-house bean roasting and manufacturing facilities;

·          Maximize on our established “OLDTOWN” brand name by expanding our product portfolio of coffee and other beverages in the retail sector.

·          Continue to provide high standards of quality of food and beverages at our “OLDTOWN WHITE COFEE” café outlets as well as our in-house manufactured coffee and tea beverages; and

·          Continue to expand on our network of “OLTOWN WHITE COFEE” café outlets through our franchise program locally as well as overseas.

7.    Does Oldtown Group is non halal or halal?

          Nowadays, Oldtown already enjoys a huge following among the Chinese population in Malaysia, which makes up more than 80% of its customers. Currently, the group’s beverages and food outlets are not, Since being certified Halal is key to winning over the majority Muslim community, most F&B is targeting Muslim customers need to unsure that their products are HALAL-compliant. Oldtown Company are receive HALAL certification from the more prominent HALAL certifier, Department of Islamic Development Malaysia (JAKIM) by 3QFY12 fro its F&B outlets.

8.    Will the Franchisor supply a list of franchisees so that can contact them?

Yes.