Spain's Telepizza to open quick-serve chain

March 29, 2002

MADRID -- Spanish pizza delivery giant Telepizza, plans to open a chain of 120 quick-service pizza restaurants under the brand name of La Piazza. The company expects that 90 percent of the units will be franchised.

TelePizza is the industry leader in the Spanish pizza market, with more than 760 outlets in that country and seven others. The company posted sales in 2000 of approximately $290 million, and it employs some 9,500 people.

Projected average cost to open a La Piazza restaurant is 390,000 euros (about $438,000 U.S.), while first year sales are estimated at 721,000 euros (about $887,000 U.S.) per outlet. The first of the new restaurants opened in Avila in September, and four more will open before the end of 2001.

The company's aggressive growth plans were not well received by the Spanish stock market; the price of Telepizza shares dropped by 3 percent to upon the announcement.

TelePizza has struggled in recent years to meet its own aggressive growth goals. The company closed its TeleGrill and TeleOriental chains when neither proved profitable, and management ended its franchise buy-back policy earlier this year. It also has slowed its international expansion in Mexico, France and the UK to trim losses.

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