PropNex terminates master franchise agreement in Vietnam but will maintain single franchise there

MAINBOARD-LISTED real estate agency PropNex OYY has terminated its master franchise agreement with its Vietnam franchisee and is disposing of its entire stake in that business, it said in a Monday announcement after the market closed.

But it will retain a presence in Vietnam under a new unit franchise agreement.

PropNex had entered the master franchise agreement in Aug 2018 to bring its brand to Vietnam, with an initial term of 10 years. Upon the franchisee's request, PropNex has now consented to the early termination of the agreement.

This decision was made after PropNex did a strategic review of its franchise agreements and investment in Vietnam, "in light of the uncertainty in the global economy and in the property market caused by the Covid-19 pandemic", said the company.

PropNex will dispose of and transfer its entire sale equity interest in PropNex Realty Vietnam for the nominal sum of S$1, to the latter's executive director Aidan Wee.

But it has also entered a unit franchise agreement as of Sep 1 with Wee Realty Co Ltd, owned by Wee. Under this agreement, the unit franchisee will establish, manage and operate a single PropNex franchise agency in Vietnam.

"The entry into the unit franchise agreement allows the group to maintain presence while waiting for the economy in that country to recover," said PropNex.

PropNex shares closed up S$0.02 or 1.05 per cent at S$1.93 on Monday before the news.