The Strauss Group is selling Max Brenner, the international restaurant chain and chocolate retailer, to Israeli franchisees Yaniv Shtanger and Dudu Vaknin for about 18 million shekels ($5 million).
The agreement calls for the sale by the Strauss Group of the use of the brand as well as its three restaurants in the United States. It also provides for the assignment to the pair of its international franchise agreements along with the percentage of sales revenue that franchisees are obligated to pay the franchiser.
Max Brenner’s Israeli plant will be leased to Shtanger and Vaknin by Strauss for five years with an option for an extension, and the staff at the plant will be employed by the chain’s new owners.
The Strauss Group, a global food and coffee retailer based in the Tel Aviv suburb of Petah Tikva, is the product of a 2004 merger between the family-owned Strauss dairy and food company and Elite Industries, a manufacturer of coffee and chocolate. Elite purchased the Max Brenner chain in 2001, six years after it was founded as a retail seller of premium chocolate.
Max Brenner has now grown into a chain with 60 locations in six countries – Israel, Australia, Japan, the United States, Russia and South Korea. Other than in the United States, however, the locations are all run by franchisees that pay a small percentage of their sales to Strauss.
The Max Brenner firm was founded in Israel in 1995 by Max Fichtman and Oded Brenner. In 2003, two years after its acquisition by Elite, it opened its first restaurants, or “chocolate bars” as they were dubbed because of the dominant place that chocolate has on the chain’s menus, and for the chocolate retail sales at the restaurants. The concept expanded to the United States in 2006.
Last year, the Max Brenner restaurants accounted for 94 million shekels in sales for the Strauss Group, a small fraction of the 8.1 billion shekels in revenues that Strauss’ other business generated last year. Over the past year, Strauss has taken steps to acquire 100% ownership of businesses in its core areas of operation and has sold operations that it views as not a good fit with its central food and beverage manufacturing business.
The sale of the Max Brenner chain was preceded in March by Strauss’ acquisition of the remaining stake in its global coffee business from its partner, the buyout firm TPG Capital Management, for 257 million euros ($279 million). Prior to that, in November 2016, the Strauss Group bought the minority shares in its Strauss Water subsidiary for 66 million shekels.