Yarra Valley Farms to boost franchisee recruitment after major acquisition

Inside Franchise Business: Yarra Valley Farms is expanding its franchise networkFranchise distribution business Yarra Valley Farms will be ramping up its franchisee recruitment following a major acquisition.

The business has been acquired by In2Food, a major food supplier to South African-based multinational retail company Woolworths Holdings which owns the David Jones department store chain.

Yarra Valley Farms is the first independent national fruit and vegetable supplier and retailer in Australia. The company currently supplies more than 400 commercial and hospitality clients, as well as some of Victoria’s leading restaurants.

Bill Kollatos, Yarra Valley Farms managing director, will become CEO of In2food Australia.

Kollatos told Inside Franchise Business franchising is an integral part of this expansion.

“In the acquisition, In2Food and the bank partners see significant value in the franchise model. This galvanises our strategy and puts more pressure on us to ramp up our franchise recruitment,” he said.

“We’ve tweaked our franchise model and are very confident in it and how it works for franchisees.

“Our logistics needs to expand considerably and In2Food understand the best way to get produce to a customer is through the franchise model.”

And to ease the financial challenge for incoming franchisees, Yarra Valley Farms plans to finance the $75,000 franchise fee over the term of a franchise agreement (five years with one option to renew for a further five years). Successful prospective franchisees will need to find the finance to lease the truck and working capital.

The acquisition also included Inspired Food Solutions, which is an existing joint venture with In2Food and Yarra Valley Farms formed to support the David Jones strategy to develop its food profile.

The In2Food amalgam also includes a competitor to Yarra Valley Farms in Sydney, TMF, which provides core produce and prepared produce; and a similar unnamed acquisition in Queensland.

“This makes us the largest player in food service for core produce, prepared produce and prepared food,” said Kollatos.

“Our key focus is to be robust in food service and we have an intention to expand our retail food offer.”

In2Food has plans to expand its reach over the high-end produce market in Australia. The company already has a local presence, servicing David Jones.

Law firm Norton Rose Fulbright acted for In2food in the acquisition. Lead partner Ben Smits said that the deal was a “game changer” for the Australian food market.

“This sector of the market is very fragmented and it will be very interesting to see such an established and sophisticated player such as In2Food operate with such enhanced scale and with such a strong management team and strategy,” Smits said.