Louisville, Kentucky-based Tricon Global Restaurants Inc. is closing or refranchising more than 1,400 of its marginally performing Pizza Hut stores to dramatically refocus its business, the company recently announced.
Tricon has begun the process of closing 741 and reselling 667 of its domestic and international units. The refranchised stores are generally being sold in packages of five to 30 restaurants. "We're going to look to our existing franchisees if we're going to refranchise the stores," says Pizza Hut Inc.'s Jay Allison.
Tricon's chairman and CEO, Andrall Pearson, says these moves address Tricon's two biggest strategic issues: strengthening Pizza Hut's domestic asset base and building international markets.
With more than 7,200 restaurants and delivery units in the United States and 3,000 international locations, Dallas-based Pizza Hut generates almost half of Tricon's earnings but has seen a decline in recent years. But company officials anticipate the plan will have a positive effect on Tricon.
Restaurants are being geographically packaged and sold to restaurateurs with multiunit-operation experience and a minimum net worth of $1 million.