CBA cancels franchise agreement for 80 stores

Retail

Hungarian-owned retail chain CBA is ending its franchise contract with wholesale firm Palóc Nagykereskedelmi, which has been operating 80 CBA retail stores under a franchise agreement in the north of the country, Hungarian news agency MTI reported yesterday.

CBA charged the franchise partner with failing to fulfill its contractual obligations, and has therefore removed it from the franchise network and prohibited it from using marketing elements and logos of CBA. According to reports, the stores have temporarily closed to make the necessary changes in inventories. 

József Czékmán, the managing director of Palóc Nagykereskedelmi, which employs about 1,300 people in Nógrád County, confirmed reports about the closing of stores, adding that after assessment of inventories scheduled for today and tomorrow, all the stores are foreseen to reopen next week. He added that potential buyers have already expressed interest in the stores, according to MTI.

The news agency noted that Palóc Nagykereskedelmi has been loss-making in the last three years and some of its stores have had problems with inventories and supply management in recent weeks.

According to a CBA statement Wednesday, the 80 units operated by Palóc Nagykereskedelmi are the latterʼs rented or own property, consequently CBA has no say in their potential continuing operation or sale.

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