Allied Brands has purchased the Freedom Home & Cafe and Bayswiss stores from Steinhoff Asia Pacific and will rebrand them to Villa & Hut. 

Hand over of the 13 stores will begin on November 16 and is expected to be completed by May next year. The transaction does not affect the 68 Freedom furniture stores also owned by Steinhoff Asia Pacific.

Allied purchased the 25 store Villa & Hut homewares franchise in June this year for $2.8 million. The rebranded stores, which are to be franchised, will take the Villa & Hut's store numbers to 38.

The listed company is also the owner of the Baskin Robbins, Cookie Man and Kenny's Cardiology franchise chains.

As part of the purchase, Allied has also undergone capital raising of $1.6 million, in order to purchase fixtures, equipment and stock for the new stores. The company expects each store conversion to cost between $1.2 and 1.8 million.

The new Cookie Man plant at Mt Kurring-gai in Sydney will provide the new outlets with coffee, adding 13 tonnes to its annual output.

Shane Radbone, Allied MD, said the majority of Freedom Home & Cafe and Bayswiss stores are located in shopping centres, as opposed to the existing Villa & Hut stores which mainly operated in airports and DFO outlets.

"The rollout of these new franchise stores will accelerate the development of Allied Brands' Villa & Hut business, while at the same time allowing organic growth already predicated to continue in the highly successful airports and DFO divisions.

"We will use the rollout to launch a new franchise service division to take advantage of the opportunities evident in the franchising industry and the large number of companies wishing to use franchising to grow, but who need assistance," Radbone said.

The new franchise service division is already in discussions with two retails chains to convert to a franchise model. Radbone said that the number of stores currently under negotiation was 150, with the roll out to take place over the next two to three years.