Restaurant Brands is to sell some of its Pizza Hut stores to owner-operators, under a new arrangement with Yum! Restaurants International.
Announcing the deal today, Restaurant Brands said up to 10 stores could be sold in the first year.
Pizza Hut has been a challenge for Restaurant Brands for some
time, although in its latest figures the company reported the first quarterly rise in nearly four years in both total and same store Pizza Hut sales.
At the end of the quarter, May 25, the company had 92 Pizza Hut stores, down four on a year earlier.
Today, Restaurant Brands said the pizza market in this country had changed considerably in recent years.
A substantial rise in the number of competitors made certain stores better suited to hands-on management by owner-operators, rather than the corporate model under which Restaurant Brands now operated the stores.
Restaurant Brands would continue to run marketing and operations for Pizza Hut in this country, and continue to manage the brand in New Zealand on Yum!'s behalf.
It would represent Yum!'s interests with the new franchisees and would receive a management fee in return.
The agreement also allowed Restaurant Brands to close a small number of loss-making delivery stores.
Dine-in restaurants, of which eight remained, would continue to be progressively closed, with the last expected to be shut by next year.
Proceeds from Pizza Hut store sales would be used to retire debt.
Under the deal, Yum! will re-grant franchise agreements to Restaurant Brands for Pizza Hut stores for an initial 10 years, with a further 10-year right of renewal.
Restaurant Brands said the new arrangement placed it in a much stronger position to grow the Pizza Hut brand, and was viewed as a major step forward in adding value for shareholders.
Shares in Restaurant Brands, which also operates KFC and Starbucks Coffee, closed at $1.01 yesterday, having nearly doubled from a year-low of 57c last November.
- NZPA
