Retail Food Group Ltd (ASX:RFG) says it had reached a conditional agreement to acquire the New Zealand master franchise business for the Esquires Coffee Houses franchise system.

Subject to usual and ordinary terms, the transaction is conditional upon the contemporaneous settlement of a separate agreement pursuant to which RFG shall also acquire the intellectual property rights for the Esquires Coffee Houses system for the territories of Australia and New Zealand from the owners.

RFG said the salient commercial terms of the contract have been agreed, but formal contract documentation is yet to be executed between the parties.

Completion of the aforesaid transactions will result in RFG being the intellectual property owner, franchisor and licensor of the Esquires Coffee Houses system within Australia and New Zealand.

The Esquires Coffee Houses system originated in Canada and was first established in New Zealand by way of master franchise in 2001. The New Zealand network has a current footprint of 46 outlets and is the largest franchised coffee chain within that country. It is yet to be established within Australia.

RFG said further information will be provided to the market including import and effect for its existing franchise system network and in particular the alignment with, and future development of, the bb's café franchise system after the settlement of the transactions anticipated in or about mid February 2011.