Long-term Pizza Hut franchise with CRG at an end

Yum Restaurants managing director Sran Smutkochorn called the expiry part of his company's business development and brand-building to ensure the highest efficiency for the Pizza Hut brand.

"The end of the franchise contract with CRG will help Yum consolidate its work for maximum efficiency, which will be of greater benefit to the company and the Pizza Hut brand. It's better for us, too, in terms of new-store expansion," he said.

CRG is still the local franchisee for KFC restaurants.

However, a source in the local fast-food industry said the end of the agreement with CRG would have a significant effect on Yum, meaning the loss of many major locations for its Pizza Hut restaurants, such as Central Lat Phrao, the Central Silom Complex, Central Pinklao and Central Bang Na.

Pizza Hut has not been included in any new Central shopping centres, such as Pattaya and Chon Buri town.

CRG used to operate 20 Pizza Hut restaurants, mainly in Central shopping complexes. With the end of the contract, 10 have been returned to Yum and the rest closed.

Sran said the business plan for Pizza Hut would be more concrete in the next month or two.

In a previous interview, Sran said Yum Restaurants, which owns the KFC and Pizza Hut chains in the Kingdom, was committed to spending Bt1.8 billion on store expansion and marketing this year, 70 per cent from Yum Restaurants and 30 per cent from franchisee CRG.

That figure is higher than last year's Bt1.6 billion spent on opening new KFC and Pizza Hut outlets.

"We opened 12 Pizza Huts and 51 KFCs last year, making a total of 360 KFCs and 88 Pizza Huts," said Sran. "This year we expect to have 450 KFCs and 108 Pizza Huts."

Aniruth Mahathorn, marketing director at The Pizza Company, said the move would benefit his outfit in terms of greater business opportunities.

"We've beaten Pizza Hut in many big shopping complexes, with about a 70-per-cent share. The end of the franchise agreement between Yum and CRG will enable The Pizza Company to sell more pizzas," he said.

He speculated Pizza Hut might focus more on other channels now instead, such as home delivery.

The Pizza Company operates 204 outlets, of which 106 are seated restaurants.

Aniruth said The Pizza Company had beaten Pizza Hut in all strategic channels in Thailand, modern trade outlets and home delivery alike.

He said that while Pizza Hut concentrated on launching product innovations, The Pizza Company had always focused on offering premium quality and good value for money.