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Nov, 26 2014

Yum! Restaurants to sell KFC biz in western India to franchisee

The brand is planning to sell the business to a franchisee in order to avoid real estate costs such as rents, staff costs and other overhead expenses. Yum presently operates 18 outlets in the western region.

Yum! Restaurant is planning to sell its KFC business in western India to Franchisee, reported ET.

The brand has put its company-owned KFC business on the block in western India.

The US chain, presently run 700 KFC, Pizza Hut and Taco Bell outlets in the country through a mix of company-owned and franchisee outlets.

The brand is planning to sell the business to a franchisee in order to avoid real estate costs such as rents, staff costs and other overhead expenses. Yum presently operates 18 outlets in the western region.

The earnings statement of Yum! Restaurants for the quarter ended September shows a 14 percent increase in system sales in its India division, driven by 26 percent unit growth.

But same-store sales declined 4 percent and operating loss stood at $3 million. A Yum! Spokesman said in response to ET's query: "While we continue to explore opportunities in the course of business, as a policy, we do not comment on market speculation."

While Pizza Hut business is entirely run by franchisees including Devyani International, owned by Ravi Jaipuria and the 350-plus KFC outlets are run partly by franchisees and partly by Yum! itself.

Devyani is Yum!'s biggest franchise operator, and runs close to 300 Pizza Hut and KFC stores in the North and East. Other partners of the group include Dubai-based Dodsal group and Malaysian firm KFC Malaysia.

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