Pret agrees to pay $3.9m compensation over shelved Israel franchise deal

Pret A Manger operates 700 stores across 18 markets | Photo credit: Pret A Manger

UK coffee and food-to-go chain Pret A Manger has agreed to pay £3m ($3.9m) in compensation to Israeli retailer Fox Group and restaurant operator Yarzin Sella Group following the termination of its franchise agreement in June 2024. 
 

Pret A Manger announced a 10-year franchise deal with Fox Group and Yarzin Sella in January 2023 and planned to open 40 licensed stores in Israel by 2033 – the first of which was scheduled to open in the commercial Tel Aviv Port district in December 2024.   

However, a spokesperson for the coffee and food-to-go chain told World Coffee Portal in June that it had taken the ‘difficult decision’ to end the contract, citing significant travel restrictions in the country amid the ongoing conflict in Gaza as impeding its ability to conduct the required checks and training to establish the brand.  

Fox Group was opposed to the contract termination and has agreed a settlement to avoid legal action against JAB Holding-backed Pret. Pret A Manger told World Coffee Portal that the £3m ($3.9m) sum is intended to help Fox Group and Yarzin Sella recover the investment they had already made into the franchise agreement.  

Part of the settlement requires Pret A Manger to involve Fox Group in any new attempt to launch in Israel within the next 36 months.  

“Given the current circumstances, we still have no plans to open shops in Israel. We have now agreed with Fox Group and Yarzin Sella Group that they will have the opportunity to enter into a new license agreement with Pret, should we choose to open shops in Israel before October 2027,” a Pret spokesperson told World Coffee Portal. 
 

Founded in 1986, Pret A Manger operates 700 stores across 18 markets. The coffee and food-to-go chain achieved £1bn annual sales for the first time last year, while group sales in the first six months of 2024 reached £569m ($752m).