Restaurant Brands pays $10.5M to take over operation of Carl's Jr burger chain in NZ
Restaurant Brands New Zealand, the nation's largest fast food operator, agreed to buy seven Carl's Jr stores owned and operated by Forsgren NZ for $10.5 million, making it the sole operator of the burger chain brand in New Zealand.
The acquisition from family interests of Barry Forsgren will take the company's total number of Carl's Jr stores to 16, Auckland-based Restaurant Brands said in a statement. Forsgren opened the first Carl's Jr stores in New Zealand in July 2011.
Carl's Jr, Restaurant Brands' newest chain, turned to a profit of $100,000 in the first half of its financial year, from a loss of $200,000 in the year earlier period as sales rose 34 percent to $8.8 million. Restaurant Brands added Carl's Jr to its existing KFC, Pizza Hut and Starbucks Coffee chains in November 2012 to better compete with rivals McDonald's Restaurants (NZ) and Burger King Corp. The company is eyeing a potential of 60 Carl's Jr stores in New Zealand.
"We see the acquisition as a strategic opportunity to add critical mass to our Carl's Jr chain and will use the increased scale to further leverage marketing and supply chain opportunities," said Restaurant Brands chief executive Russel Creedy.
The sale is slated for completion in the middle of this month, pending the approval of US-based franchisor CKE Restaurants Holdings and assignment of leases. Restaurant Brands said it would offer employment to existing Forsgren employees.
Separately, Restaurant Brands has signed a master licensing agreement with CKE which will allow Restaurant Brands to sublicense Carl's Jr stores in New Zealand to third-party franchisees.
"Licensing smaller franchisees to operate the Carl's Jr brand in locations where they can operate the business effectively will allow more rapid expansion of the Carl's Jr store network," Creedy said.
Restaurant Brands operates a similar model with its other brands, with the company receiving a share of royalties and fees in return for the development and supervision of sublicensed stores.
CKE is thrilled by the performance of its brand in New Zealand and believes the acquisition by Restaurant Brands will create the platform for accelerated growth in the market, said Ned Lyerly, president of CKE's international division.
Shares of Restaurant Brands last traded at $3.70 and have gained 32 percent so far this year.