The finalisation of details yesterday of a decision made last year by Restaurant Brands [RBD.NZ] to ditch their company owned Pizza Hut restaurants and flog them off to owner/operators brings to an end the long running saga of this money losing brand in RBD's stable of 3 - KFC & Starbucks being the two others - brands.
For many years Pizza Hut has dragged down the company bottom line while KFC has struggled at times to hold up the whole company - Starbucks has also been a money loser since its introduction in 1999.
Many of my readers will know that I was a early shareholder of RBD and actively pushing management back in 1998 to ditch Pizza Hut and sell them to owner operators as that was how their competition was kicking Pizza Hut's backside.
Better late than never!
This latest development will be good for RBD shareholders. Not only will RBD get one-off money for selling Pizza Hut stores but they will also get ongoing management fees for each store that is sold-a sub franchisor of sorts, as YUM! still remains the big daddy franchisor.
All Restaurant Brands shareholders need is the double -Starbucks to be sold off - and the company will be much more able to withstand the highly competitive fast food market with KFC as the big star.
Of course the Pizza Hut sell off provides a good opportunity for individuals to buy a run down business and develop it into a good one.
A franchised pizza business like Pizza Hut, if run well, is a great way to make money.
Domino's Pizza owners in New Zealand have done this well over the years and this has left Pizza Hut as the also ran after being the dominant pizza force in New Zealand for years.
If you have a couple of hundred thousand free cash and access to debt you might well want to give RBD a call right now.
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