OldTown White Coffee, Madam Kwans and Secret Recipe. These are some of the most recognizable local brands synonymous for their Malaysian classics and homely ambience. Among these household names was PappaRich, a name that seems to have faded from the public eye - almost overnight.
In just a short amount of time, PappaRich outlets across Malaysia have all but disappeared one by one and it’s a wonder how such a popular, mainstream brand beloved by locals all over could just close its doors.
Founded in 2005, at its peak Papparich had 55 stores dotted across Malaysia. Further expansion of this Malaysian F&B power brand saw its international footprint with overseas franchises reaching 11 countries including included Australia, Brunei, Cambodia, China, Indonesia, New Zealand, Singapore, Sri Lanka, South Korea, Taiwan and the USA across the globe - with bustling chains of their own. So, what went wrong?
Was it a victim of unfortunate circumstances? Was this just another case of a business that didn’t live up to what was expected of it? Most likely so.
Debt can be a harrowing expense for both a business and a person. In the case of a restaurant chain such as PappaRich, it was a hefty debt that was seen as the ‘killing blow’ that led to its inevitable closure. A total of RM37.22 million in unpaid debts to be exact. Not to mention a wind-up order that would see the start of the business shutting down its operations.
To fully understand how it got in this predicament, we would have to go way back to 2014 when PappaRich Group Sdn Bhd (PGSB), investment holdings firm Agathisfour and PappaRich Malaysia joined an agreement. This would see Agathisfour acquire 4.47 million shares in PappaRich Malaysia for RM24 million and another 325,303 new shares in the company for RM6 million.
PGSB was required to settle in full amounts owing to PappaRich Malaysia within 36 months from the date of the agreement, along with amounts owing to RRI by October 2015. The date was later extended to May 2017 but by then, the company had still failed to fully settle the balance amount owning, totalling RM37.22 million.
Come 2020, a wind-up petition was filed against the company twice by one of its shareholders, Chen Kaiwen and AgathisFour in mid-May. A year later, PGSB was issued with a winding up petition by the High Court of Malaya.
From then on, all traces of PappaRich slowly started to disappear from shopping centres and lifestyle hubs, despite it reassuring that the petition would not affect its operations. This came at a time where many F&B franchises were faced with no other choice but to close due to the pandemic, and most would assume that the same happened to this once celebrated brand.
In truth, PGSB’s profits have been on the decline since 2012, having fallen into a sort of ‘red zone’ with a reported net loss of RM11.93 million during its financial year in 2018.
The only remnants of what was once PappaRich Malaysia are their social media channels, with its last Instagram and Facebook post dating back to May 2020. But all hope to taste their curry laksa again is not all lost. The chain still lives in other parts of the world such as Australia through their partners at ST Group Food Industries Holdings, where it seems to be thriving as of date.
Though we may have had to say goodbye too soon, it was good while it lasted.