Taco Bell has been thrown a lifeline after the fast food giant’s Australian expansion was thrown into limbo.
ASX-listed Collins Brands announced will offload 20 of its 27 Taco Bell stores to an affiliated company, Restaurant Brands Australia (RBA), within months.
Restaurant Brands is a global partner of Taco Bell’s parent company, Yum! Brands, and operates Taco Bell restaurants across NSW and international markets.
RBA have proposed taking over operations at 20 Taco Bell stores under a new partnership agreement, but the remaining 7 stores will be closed within weeks.
Taco Bell stores are located in NSW, Victoria, Queensland and Western Australia, it is not known which stores will close.
Employees at the 20 stores remaining open will be offered new employment agreements from RBA.
The deal is expected to be finalised by August this year, depending on Australian Competition and Consumer approval.
Collins Brands, which operates KFC stores across Australia and Europe, reported softer performance at its Taco Bell stores. Earnings slipped 3 per cent to $23.6 million in the first half of the financial year, resulting in a modest $500,000 profit, according to media reports.
Collins Brands Chief Executive Officer Xavier Simonet, said he was pleased to transition 20 Taco Bell restaurants to RBA and its local partner, subject to completion of the deal.
“This will enable Collins Foods to focus on our core KFC business in Australia and Europe, including accelerating profitable development in Germany,” he said.
“We are especially pleased that our team members working in the 20 transitioning Taco Bell restaurants will be offered continuity of employment and job security.
“We are committed to ensuring a smooth transition and to supporting all our team, whether transitioning or otherwise, through this process.
Taco Bell Australia General Manager said this was an important moment for the restaurant in Australia.
“We strongly believe in this market and are excited about the future with a clear focus on growing the brand to bring more Taco Bell restaurants to more Australians,” he said.
“This new partnership with RBA reinforces that we are here for the long term.”
