After signing a sales agreement to sell half of Joe Gourmet Coffee Ltd. (Cup 'O' Joe), the chain's founder, David Klein, is relinquishing control over the company. Delek Israel Fuel Corporation Ltd. (TASE: DLKIS) reported to the TASE that with the completion of the deal, it will hold 51% of Cup 'O' Joe's shares and not 50% as previously reported. Apparently, Delek Israel realized that it will only be able to implement reforms and investment in the chain if it controls the company.
Cup 'O' Joe was founded by David Klein and Dov Goldfarb in 1997. Klein, the dominant partner in the chain's management, recently moved to the US. The chain has 63 branches, operated by franchisees. The company also owns a coffee production plant in Holon, which supplies the chain, as well as the Dan Hotel chain under the label, "Cup 'O' Joe", and other private label customers. All Cup 'O' Joe branches are franchises, except for the HaHashmonaim St. branch in Tel Aviv.
Delek Israel believes that Cup 'O' Joe will be a synergistic activity for the company. Initially, Delek Israel intends to incorporate Cup 'O' Joe into Menta convenience stores, in an effort to create brand recognition for Cup 'O' Joe, and to compete with Yellow convenience stores' Lavazza coffee currently available at Paz gas stations. Secondly, Delek Israel plans to open dozens of new retail outlets, which will all include Cup 'O' Joe branches.
Published by Globes [online], Israel business news - www.globes-online.com - on September 25, 2011
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