Yum! Brands Inc., a United States-based fast food chain company, has sold off its full stake in Pizza Hut Korea Ltd. to local company Orchard One Inc., but both parties agreed not to disclose the buyout conditions including sales price. Following the deal, Pizza Hut Korea signed a master franchise deal with the new owner.
According to the Korean unit of the fast food brand on Thursday, Orchard One Inc., a special company set up for the acquisition, bought a 100 percent stake in Pizza Hut Korea from Kentucky-based franchise giant Yum! Brands that owns a number of global fast food brands such as Pizza Hut, KFC and Taco Bell. Orchard One is affiliated with KH Investment Inc., a local investment firm engaged in investment and consulting services in various sectors including mergers and acquisitions, as well as venture and private equity investments.
Pizza Hut, which entered the Korean market in 1985 by opening its first store in Itaewon, central Seoul, has maintained dominant presence in the local dining industry. Currently, it has 330 franchised stores across the country.
The latest selloff comes nearly two years after speculation for a possible sale of Pizza Hut Korea by Yum! Brands first loomed. In 2015, the U.S. franchise mogul turned Pizza Hut Korean operations into franchised stores from self-operated outlets and cut thousands of jobs, spurring rumors that the U.S. franchise king was preparing to exit the Korean market. Yum! Brands denied such a speculation at that time.
Yum! Brands sold Pizza Hut Korean operations to fulfill its mission “to build the world’s most loved, trusted and fastest growing restaurant brands,” according to Pizza Hut Korea. The move was made as part of the company’s efforts to respond more promptly to changes in the dinning industry and to search for new business opportunities by streamlining decision-making process that will help the firm cope well with Korea’s rapidly-changing food services industry, it added.
Orchard One, the new owner, plans to manage Pizza Hut Korean operations under the Korean unit’s growth strategy and provide active support in increasing the number of stores and diversifying retail channels based on its partnership with franchisers and new menu development for local consumers.
It said the current management board of Pizza Hut Korea will be maintained and it has no plans for job cuts. Contract deals with existing franchises will also remain unchanged under the new owner.
By Baek Sang-kyung
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