VTL Group Sells its U.S. Franchise Assets to U.S. Equity Firm Bacon Whitney Corp.

VTL Group, based in Auckland, New Zealand, recently sold its U.S. franchise assets for $67.5 million to Bacon Whitney Corp, an American company owned by Halpern Denny Fund III LP.

The Halpern Denny Fund is one of three Boston, Mass.-based equity investment funds linked to John Halpern and George Denny, with more than $700 million under management between them.

VTL said the two investors held 9.95 percent each in VTL, and each had an agreement to purchase additional shares, which would lift those shareholdings to 21.21 percent.

Bacon Whitney bought from VTL’s American arm, Service America Group, all of that company’s franchising assets, including the 24Seven franchising licenses granted to it, the 64 existing franchises, and all its interests in Universal Vending Management LLC, a vending management firm.

Service America Group was previously known as All Seasons Services Inc.

Bacon Whitney paid by way of a 5-year subordinated note for $67.5 million, paying 10 percent per annum and convertible after six months at the election of Halpern Denny Fund III into equity securities of Bacon Whitney.

VTL also agreed to grant Halpern Denny the right to put its shareholding in Bacon Whitney on the basis of one share in VTL in exchange for each share held.

VTL Chairman Gary Stevens said the proposal endorsed VTL’s strategy of being a global franchisor, and assisted in establishing the value of its proprietary vending machine technology and 24Seven intellectual property. VTL will retain ownership of its Shop24 operation and the right to license its technology.

In addition to the purchase price, VTL will receive revenue from the supply of technology services to Bacon Whitney.

Federal Reserve ruling on debit receipts seen as boost for small value cashless transactions
The director of the Smart Card Alliance said the Federal Reserve Board’s recent decision to modify its Regulation E and eliminate the requirement to provide a receipt for debit purchases under $15 will benefit both consumers and merchants by making smaller transactions quicker and more cost effective.

“Contactless payment adoption at quick-service retail stores in the United States took off in part as a result of the payments industry rule changes that waived the requirement of signatures for credit card transactions under $25,” said Randy Vanderhoof, executive director of the Smart Card Alliance, in a prepared statement.

“The Federal Reserve Board ruling will be the start of another wave of locations where consumers can choose payment options other than cash or prepaid tokens or tickets at unmanned machines that demand low-cost, speedy transactions for operators.”

Previously, Regulation E required that a paper receipt be made available to consumers for all EFT and debit card transactions conducted in physical environments, including those unattended areas like transit, parking and vending machines, where consumers may not expect a receipt.

In many of these environments, the cost and operational challenges of receipt printing has limited the deployment of card acceptance terminals. The new rule, effective Aug. 6, 2007, eliminates the receipt requirement for transactions of $15 or less.

Quick-service restaurants, convenience stores and event concessionaires, along with vending, parking and transit operators, will all benefit from the Fed’s action on Regulation E, according to Vanderhoof.

The opportunity is significant: parking, vending and coin-operated machines alone represent $37 billion in annual spending, according to a report from the Federal Reserve Bank of Philadelphia, Pa.

Bravo! Brands ends master distribution agreement with Coca-Cola Enterprises
Bravo! Brands Inc. reached an agreement with Coca-Cola Enterprises, Inc. to terminate the master distribution agreement (MDA) entered into by the parties on Aug. 31, 2005. The termination allows Bravo! to move forward to finalize its negotiations with a new national distributor for its products.