Hotpot chain Little Sheep ends franchise agreement with No Signboard

LITTLE Sheep Hong Kong Holdings, which operates hotpot chain Little Sheep, has terminated its franchise agreement with No Signboard Holdings, due to the seafood restaurant operator’s failure to set up the required number of new restaurants under the agreement.

In a regulatory filing on Tuesday (May 23), the Catalist-listed No Signboard Holdings said it received a letter of termination from Little Sheep to end the development agreement, which was entered into by both companies on Jun 18, 2018.

Under the agreement, which was for a term of 10 years, No Signboard was to have launched one restaurant a year in the first five years.

The Hong Kong restaurant operator had cited No Signboard’s failure to meet the required number of new restaurants, or total number of restaurants to be operated, as reasons for the termination.

Additionally, No Signboard owes an outstanding payment of US$61,695.85 — in late payment fees and penalties — to Little Sheep, due May 26, 2023. Little Sheep has also demanded that No Signboard cover the losses incurred as a result of the termination, though the amount has yet to be determined.

No Signboard said its board believes the termination of the agreement will give the group the opportunity to “accelerate the rebranding of the current outlet at Orchard Gateway”.

SEE ALSO

No Signboard controlling shareholder GuGong argues termination of agreements unlawful

No Signboard terminates intellectual property, independent contractor agreements

No Signboard sinks further into the red with 39% fall in net loss for Q1

The company’s shares have been suspended from trading since Jan 24, 2022.