The agreement will bring another large retail coffee store chain to Hawai'i, increasing competition for many independent cafes as well as the ubiquitous Starbucks.

"We are always looking for new ways to enhance our offerings to customers," said Jenai Sullivan Wall, chairwoman and chief executive officer of Sullivan Cos.

International Coffee & Tea operates about 315 cafes in California, Arizona, Nevada and several foreign countries including The Philippines, Australia, Korea, China, Singapore, Indonesia and Malaysia.

The privately held coffee company founded in 1963 had estimated sales of $120 million in 2003.

By comparison, industry giant Starbucks was established in 1971, operates about 9,000 stores and in 2003 reported $4 billion in sales. Last year Starbucks revenue was $5.3 billion.

In Hawai'i, there are 48 Starbucks stores. They are majority owned by Coffee Partners Hawaii, an affiliate of local real estate development firm The MacNaughton Group.

Seattle-based Starbucks Corp., which owns a minority stake in the Hawai'i stores, also owns Seattle's Best, a brand with eight cafes in Hawai'i.

Starbucks even has three locations inside Foodland stores in Pupukea on O'ahu and on Maui in Pukalani and Lahaina.

Sullivan Wall said Foodland has leases with Starbucks, so there are no immediate plans to change that relationship.

The Coffee Bean & Tea Leaf stores will feature 32 varieties of Arabica coffee roasted by International Coffee & Tea in California. The stores also will carry a variety of full-leaf teas and blended beverages.

Foodland is developing food offerings such as fresh baked goods and light entrees for the stores. Sullivan Wall said the goal is to open the first Coffee Bean & Tea Leaf store in July. Specific locations have yet to be determined.

The franchise agreement with International Coffee & Tea continues the legacy of Sullivan Wall's father, the late Foodland founder Maurice J. "Sully" Sullivan, who introduced Hawai'i consumers to new brands.

Maurice Sullivan was the original Hawai'i franchisee for McDonald's and Dunkin' Donuts. The Sullivan business also has operated Hallmark Cards, Morrow's Nut House, specialty food and wine store Swiss Colony and jewelry retailer Coral Grotto.

"Whenever we would travel he would look for things to bring back and franchise or bring into our stores," Sullivan Wall said.

Today Sullivan Cos. runs about 100 retail stores in Hawai'i and the Mainland, including hotel and gift shop boutique operator Kalama Beach Corp., Food Pantry Ltd. and 29 supermarkets under the Foodland and Sack N Save names.

Sullivan Wall said the company looked into establishing its own coffee business in part to enhance the shopping experience at Foodland, but decided to find an established partner. International Coffee & Tea was seen as a good fit because it's a family business with similar values.

"We were impressed by their product and their management," she said. "We felt it would be a very good fit for us."

International Coffee & Tea is focusing on overseas expansion and had not been seeking U.S. franchisees, but the company said the Sullivan Cos. deal presented an exciting opportunity.

The coffee retailer also recently announced a partnership to open more than 20 cafes inside Ralphs Supermarkets in California.