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Jumbo's South Korean JV incorporated, franchise deal signed

JUMBO Group's wholly-owned unit Jumbo Group of Restaurants has entered a franchise agreement with Jumbo's newly-incorporated South Korean joint venture, the Catalist-listed food and beverage (F&B) company said on Thursday after market close.

On Feb 15, Jumbo had announced a joint-venture agreement between wholly-owned unit Jumbo F&B Services and South Korea-based TCI Inc, a subsidiary of South Korea-listed F&B firm Didim Inc. The 50:50 joint venture, named JD F&B Inc, has now been incorporated with issued and paid-up share capital of 950 million won (S$1.14 million), comprising 190,000 common shares.

On Apr 18, JD F&B entered a franchise agreement with Jumbo Group of Restaurants to set up and operate a Jumbo Seafood restaurant in the Gangnam district of Seoul. This first Jumbo Seafood restaurant in South Korea is expected to open in the third quarter of 2019.

The franchise agreement has an initial term of five years and may be renewed for a further five years subject to certain conditions to be determined by the franchisor.

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Jumbo said the incorporation is funded by internal sources, and neither it nor the franchise agreement is expected to have any material impact on Jumbo's net tangible assets per share or earnings per share for the financial year ending Sept 30, 2019.