US restaurant giant Yum! Brands announced on Aug. 31 that it has sold its 100 percent stake in Pizza Hut Korea to a Korean investment firm. The deal price has not been revealed.
The Korean unit’s ownership rights will be handed over to Orchard One, a newly established firm for the deal by Korean investment consulting firm KHI.
Pizza Hut Korea said it will continue operations through a master franchise contract with the US headquarters. Despite the ownership change, the company added there will be no layoffs and existing franchisee contracts will be maintained.
In his visit to Seoul in May, Pizza Hut Restaurants Asia Managing Director Vipul Chawla flatly denied any plans to sell the Korean unit.
There are more than 330 Pizza Hut outlets in Korea. Like other franchise restaurants, the pizza chain has also suffered from operating losses in recent years. Its sales exceeded 300 billion won (US$267.30 million) until the early 2000s but the figure plunged to 114.2 billion won in 2014 and 89.3 billion won in 2015.
Yum! Brands’ KFC has also seen several ownership changes in Korea in recent years due to sluggish sales. KFC Korea, once owned by Doosan Group, a Korean conglomerate, was sold to CVC Capital for 100 billion won in 2014. But the firm continued to make losses in the first half of this year. In February, KG Group, a local mobile payment service company, acquired the firm for about 50 billion won.
By Song Seung-hyun (firstname.lastname@example.org