Cash Converters welcomes US investment
Since 2001, CC United has held a licence to the territories of Virginia, North Florida and Eastern Pennsylvania. Under its licence, it has the exclusive right to develop Cash Converters stores within its territory and is contracted to pay a royalty of 20% of its gross receipts from franchisees.
CC United held the First Right of Refusal to purchase the territory rights for the following states at a price of US$2,500 per store times the number of stores projected for the state (being the population divided by 100,000): District of Columbia, Delaware, North and South Carolina, Georgia, Florida, Maryland, Texas, Ohio, New York, Kentucky, Alabama, Tennessee, Louisiana, Mississippi, Arizona, Michigan, Wisconsin.
Under its licence CC United has opened and operated seven corporate stores. EZCORP's subsidiary has taken an assignment of all of the rights of CC United and has also acquired all seven Cash Converters stores. It will also be responsible to pay all royalties under the licence.
In April 2011, EZCORP acquired the trademark and licensing rights of Cash Converters in Canada, including the franchisor rights with respect to 13 Cash Converters franchised stores in Canada.
Since then, EZCORP has opened one company-owned store under the Cash Converters brand and has converted 14 of its existing CASHMAX stores to the Cash Converters format and brand. EZCORP intends to convert the remainder of its 58 CASHMAX stores to the Cash Converters brand over the next year.
As a result of these transactions, there are no sub-franchisors or trade mark licensees within the USA and Canada other than wholly owned subsidiaries of EZCORP.
Cash Converters International Limited played no role in these acquisitions by EZCORP other than providing a formal consent to the assignment of the licences. However, the Company supports these initiatives.
Cash Converters managing director, Peter Cumins, said: 'We are delighted that the commitment by our major shareholder to the Cash Converters brand has taken such a tangible form. We see this as a very promising start by EZCORP along the path of developing our brand in the USA and Canada to the mutual benefit of both companies.
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Pay day and personal loans specialist Cash Converters International (LON:CCVU) has welcomed US pawn broker EZCORP's acquisition of its rights as sub-franchisor to the Cash Converters brand and name in several states in the USA.
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