Pizza Hut plans Canadian expansion
Pizza Hut is looking for franchisees across Canada to open 100 new locations in the next five years, driven by Yum! Brands’ stated goal of dominating the world’s quick-service food market.
The Pizza Hut franchise model has been revamped, with smaller buildings and less square footage to reduce operating costs, faster equipment, and new products, including pasta and chicken wings.
The minimum cash requirement is $150,000 and assets of at least $500,000, says Canada president Sabir Sami.
Pizza Hut is a division of Yum! Brands Inc., which also owns KFC, Taco Bell and A&W. Yum! is expanding worldwide, from Canada to China to Africa.
Pizza Hut Canada has more than 300 delivery and dine-in restaurants.
“The expansion, while it is quite aggressive, it still is healthy expansion,” said Sami. “We have been consistent in results.”
Full-year EPS growth was 14 per cent in 2011, marking the tenth consecutive year of double-digit growth for Yum!
China is the powerhouse in the portfolio. Same-store sales grew 19 per cent in 2011. They declined by one per cent in the U.S.
On Tuesday Yum! Brands Inc was rated “overweight” at Atlantic Equities by equity analyst Alistair Scobie. He set a target share of $81 (U.S.) a share – about $10 above the current 52-week high.
Prospective franchisees need to exercise caution, says Toronto franchise lawyer Christopher Neufeld.
“Franchises are never a sure bet. They require a lot of work and even then, if the location isn’t right, if the product isn’t sufficiently appealing, or there is too much competition…that could result in a particular franchise failing.”
Prospective franchisees need to talk to existing franchise owners – the law provides them with the contact information for current and when possible, closed franchises. Franchisees are not obligated to report what they say back to the franchisor, so they tend to be relatively honest, says Neufeld.
Franchisees should have their contracts reviewed by an independent legal professional before signing.
Source: thestar.com