The Jamaica Observer understands that in a debt-for-equity swap which allowed the Kingston Live Entertainment (KLE) Group to focus more resources on its two business lines – Tracks and Records in the Marketplace and the development of franchised stores – the company has given up 51 per cent shareholding in subsidiary company FranJam to shareholder Josef Bogdanovich.

Bogdanovich is already the largest shareholder in KLE Group with 23.17 per cent of the company. It is understood that he received the 51 per cent shareholding in T and R Restaurant Systems Ltd — trading as Franjam — in replacement of a loan of US$650,000.

Franjam was formed to own, develop, manage and license Tracks & Records-themed restaurants, as well as manage the future growth, franchising and licensing of other Tracks & Records-themed restaurants.

Directors noted in the report for the quarter ended March 2016 that the “main benefits from this divestment were the revaluation of the FranJam asset held in KLE as well as the ability to pay off costly loans, in addition to providing much-needed capital for cash flow for future franchise expansion.


The company’s first franchise operation in Ocho Rios is due for opening in time with the Summer Olympics.


Gary Matalon, CEO of KLE, told the Caribbean Business Report that the sale of shares and restructuring of the company has freed up resources to deal with the legal and marketing costs of the franchise operation. The company also sold the Famous night club in Portmore in January for an undisclosed cost.

The turnaround in profitability seen in the first quarter, Matalon said, was an “amazing story”, as it breaks a three-year spell of losses.

“For the past four years we have been gradually adjusting our business model to better accommodate franchising the Tracks and Records brand which has been performing phenomenally. The process has not been without its struggles, but we are now at a place where we are already reaping the benefits,” the CEO noted.

For the three months ended March 31, 2016, KLE Group Ltd reported an operating profit of $4.2 million, versus an operating loss of $15.3 million in 2015. A significant reduction in expenses was attributed to the restructuring completed in 2015.

KLE’s expenses fell from $45.6 million year over year, a 43 per cent reduction. Directors said the company is now benefitting from the implementation of the restaurant system developed as the model for franchising globally.

KLE Group in the first quarter’s report said the four per cent reduction in revenue from $46.6 million in 2015 to $44.5 million was due to the divestment of the Famous business unit.

Matalon emphasised the turnaround performance of Tracks & Records Marketplace, which had revenues in Q1 2016 of $44.5 million as opposed to just $36 million in Q1 2015, or an increase of 23 per cent quarter over quarter.

The Marketplace restaurant contributed more than $4 million in profit to the group against a loss of over $5 million in 2015 for a swing of $9 million improvement year over year.

The CEO said that with Ocho Rios set to open before year end, the group would add income from shared revenues, franchise support fees, and intellectual property charges.

In other news

Jamaican based franchise company FRANJAM has signed a major contract with the UK based Casual Dining Restaurants Group (CDRG) to open 15...
KLE Group plans to set up a pop-up restaurant at the Reggae Sumfest music festival, which kicks off today, and has future plans to...
KLE Group, which franchises restaurants, beat the circuit-breaker rule to lead Wednesday's gains on the Jamaica Stock Exchange (JSE). KLE...
David Shirley has been appointed Chairman of KLE effective September 1st, 2016. Shirley who replaces Ambassador Audrey Marks is a founding...