Priszm Income Fund has announced that it has extended several franchise agreements with Yum! Restaurants International to operate KFC, Taco Bell and Pizza Hut restaurants in many locations across Canada.
These agreements are the first in a series that will extend Priszm's franchise contracts and upgrade its system. Priszm has 120 restaurants that meet Yum's current brand and image standards and has come to terms on an additional 75 restaurants.
Of the 120 restaurants that currently meet the franchisor's standards, the renewal agreements will enable the company to extend its right to use the KFC, Taco Bell or Pizza Hut trademarks, where applicable, for an additional 10-year term on 69 of those restaurants until 2019. The remaining agreements have various expiration dates over the next nine years.
Priszm also announced that it has reached further agreement with Yum! on the renewal terms for 10-year franchise contracts covering 75 additional restaurants. These restaurants, once renewed, will have a franchise term ending in 2020. The renewal of these restaurants will require a capital investment between $15 million and $16.5 million in 2010.
By the end of 2010, Priszm will have more than 150 restaurants with long-term franchise agreements in place and 195 restaurants that meet the franchisor's current brand and image standards. Renewals of the franchise agreements on the balance of the restaurants will be announced in the future upon completion of negotiations with Yum!.
Priszm will close 16 underperforming stores before the end of 2010.