Pizza Hut, a division of Yum! Brands, Inc. and the world’s largest pizza restaurant company with nearly 17,000 restaurants in over 100 countries, and Telepizza Group, the largest non-U.S. pizza delivery company worldwide with more than 1,600 stores in over 20 countries, today announced a strategic deal and master franchise alliance to accelerate growth across Latin America (excluding Brazil), the Caribbean, Spain (including Andorra), Portugal and Switzerland.
The agreement doubles Pizza Hut’s footprint in the regions covered by the alliance; places Pizza Hut in the #1 position in the category across Latin America and the Caribbean in terms of unit count; and confirms Pizza Hut’s position as the world’s largest pizza restaurant company
On its side, Telepizza Group is to become a leading multi-country pizza operator worldwide and Pizza Hut’s largest master franchisee globally by unit count.
The completion of the alliance will be subject to certain conditions, including regulatory approvals and approval by Telepizza Group shareholders.
Telepizza Group, headquartered in Madrid (Spain), operates in 23 countries with Telepizza and Jeno’s Pizza brands, among others, and celebrates 30 years with over 60 million pizzas delivered worldwide. The Company manages a total network of 1,607 stores including 441 owned stores and 1,166 franchisees and master franchisees (as of December 31, 2017) and is the leading player by number of stores in Spain, Portugal, Chile and Colombia. Total sales in its network, including owned stores, franchisees and master franchisees, recorded as chain sales, amounted €561.6 million in the 12 months ended December 31, 2017. Telepizza Group is listed in the Barcelona, Bilbao, Madrid and Valencia stock exchanges with its shares starting trading on April 27, 2016.
The content of the agreement
Across the regions covered in the alliance, Telepizza Group will target opening at least 1,300 new stores over the next 10 years, and 2,550 stores total over 20 years. The vast majority of the new store openings will be Pizza Hut, including all stores in Latin America and the Caribbean.
Telepizza Group will manage Pizza Hut’s supply chain in Latin America (excluding Brazil), the Caribbean, Spain (including Andorra), Portugal and Switzerland and will become an authorized supplier of Pizza Hut establishments. Both groups will explore further possibilities of collaboration in this field worldwide.
As master franchisee in Latin America (excluding Brazil)and the Caribbean, Telepizza Group will oversee Pizza Hut franchisees who will continue to operate Pizza Hut stores in Latin America (excluding Brazil) and the Caribbean. Telepizza Group will also progressively convert its existing stores in this region to Pizza Huts and leverage Pizza Hut’s brand awareness to accelerate store network expansion and boost entry into key growth markets.
In Spain, where Telepizza is the leading player, and in Portugal, Telepizza Group will continue operating the Telepizza brand, but it will also operate Pizza Hut stores and oversee Pizza Hut franchisees. Telepizza will leverage the best of Pizza Hut capabilities and well-known signature products.
A win-win alliance
The agreement nearly doubles Telepizza Group’s store portfolio to more than 2,500 units and €1.1 billion (1.3 Bn $) in system sales, with a presence in 37 countries with more than 500 million potential consumers.
This long-term alliance involves Telepizza Group opening 1,300 new stores over the next 10 years across regions covered in alliance: Spain, Portugal, Latin America (excluding Brazil), the Caribbean and Switzerland.
This landmark deal moves Pizza Hut to the number one position in the category across Latin America and the Caribbean in terms of unit count. Across all the markets covered in the alliance, Telepizza Group will oversee nearly 1,000 Pizza Huts and contribute nearly 1,500 of its stores to Pizza Hut’s global unit count.
This strategic deal is a long-term initiative by Pizza Hut expected to result in accelerated unit development and operating profit growth on what will be a combined initial unit count of nearly 2,500 stores. The transaction is not expected to have a significant impact on Yum! Brands’ core operating results or cash flows over the next few years.
“This ground-breaking deal is a major milestone in our journey to become the most loved, fastest growing pizza brand in the world, and Telepizza Group is the ideal partner with the capability, commitment and capital to accelerate Pizza Hut’s expansion into key high-growth regions like Latin America,” said Milind Pant, President, Pizza Hut International. “Geographically, this long-term, strategic alliance with Telepizza Group will make Pizza Hut accessible to more consumers over time, helping fulfill our mission of making it easier to get a better quality pizza.”
“Our alliance with Pizza Hut delivers on Telepizza Group’s strategic plan to transform pizza delivery with a management model grounded in improving the customer experience through best-in-class operations,” said Pablo Juantegui, Executive Chairman and Chief Executive Officer, Telepizza Group. “The deal accelerates our global growth plan, nearly doubles the scale of our business and extends our international reach to 37 countries, which represent more than 500 million potential consumers. The aspirations and capabilities of Telepizza Group and Pizza Hut International are complementary, and we are confident this deal will drive significant value for customers, employees, franchisees and shareholders as it represents an ideal platform for future growth opportunities.”
“At Pizza Hut International, we’re focusing all of our innovation, technology investments and franchise alliances on delivering the easiest, fastest and tastiest pizza experience wherever we operate,” said Enrique Ramirez, Global Chief Growth Officer, Pizza Hut. “Telepizza Group is the ideal partner to help us deliver on this focus across Latin America (excluding Brazil), the Caribbean, Spain, Portugal and Switzerland, because of their incredible depth and capability in franchise operations and supply chain management. Leveraging the strong experience of our Pizza Hut franchisees, we expect this to accelerate the growth of Pizza Hut with a best-of-both approach.”
Image over the headline.- Milind Pant (President, Pizza Hut International) -left- and Pablo Juantegui (Executive Chairman and Chief Executive Officer, Telepizza Group)-right-, today announced a strategic deal and master franchise alliance between the companies to accelerate growth across Latin America (excluding Brazil), the Caribbean, Spain, Portugal and Switzerland.Photo: Business Wire.
