Oliver's enters master franchise deal with EG Group

Oliver's enters master franchise deal with EG Group

Shares in Oliver's Real Food (ASX: OLI) are up 11 per cent since the company reached a master franchise agreement (MFA) with the Australian arm of British fuel and convenience conglomerate EG Group.

The 10-year deal announced yesterday afternoon adds to Oliver's existing food-to-go concept secured with EG in May, which has already led to Oliver's branded concessions in 90 of the 540 service stations EG bought from Woolworths Group (ASX: WOW) last year.

Under that agreement EG had promised to open 100 Oliver's Food to Go outlets within 12 months, but now the relationship has stepped up a notch.

The first EG-franchised Oliver's Real Food outlet is planned to open in Western Sydney before the end of 2020, with Oliver's the exclusive supplier of all products sold under the MFA while the British group will receive a franchise fee.

Meanwhile, Oliver's will be able to continue rolling out more locations on highway service centres and travel centres, and franchise in other market segments such as airports, hospitals, train stations, universities and shopping centres.

Oliver's CEO Tammie Phillips describes the master franchise deal as an exciting step in the company's evolution.

"Working with EG on the Oliver's food-to-go offering has allowed us to glimpse the potential this partnership," she says.

"EG has enormous belief in our concept and is prepared to make a significant investment in growing the Oliver's brand in the petrol and convenience sector in Australia.

"This partnership will provide Oliver's with a material expansion opportunity, without the capital requirement we would normally require to execute such a large scale store rollout."

Oliver's founder and chairman Jason Gunn says he is delighted a global business of EG's scale sees so much potential in the Oliver's brand.

"The ambition is to follow the blueprint of EG's partnerships with Greggs and other food retailers in the UK, expanding the nature of the service station forecourt, to become a food retail destination," says Gunn.

"When it comes to fresher and healthier convenience food in Australia, the Oliver's brand stands out from the crowd and certainly meets their criteria for offering 'best in class'."

At 10:44am AEDT, OLI shares were down 2 per cent in today's trading at $0.048 each.

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