Shares in billion-dollar franchisee group, Collins Foods, jumped almost 7% on Thursday after it announced that it has signed an agreement with KFC Europe, to be its corporate franchisee in the Netherlands.
Under the agreement, Collins Foods will develop, manage, market, support and operate the KFC business in the Netherlands, including the introduction, management and oversight of existing and future franchisees.
The deal outlines a framework for the development of up to 130 net new KFC restaurants in the Netherlands over the next 10 years. These new restaurants will be a mix of independent franchisees and company-owned restaurants.
The agreement puts in place a franchising model whereby Collins Foods will receive a fee from KFC towards their costs of running the market. Collins Foods can also earn various incentives over the term of the contract through meeting various objectives.
The deal will be effective from 31 December 2021, with an initial term of five years, and a conditional option for Collins Foods to extend the term by a further five years.
Commenting on the corporate franchise agreement, CKF Managing Director & CEO Drew O’Malley said: “Today’s announcement marks a true milestone in the progression of Collins Foods’ strategy in Europe. The corporate franchise agreement in the Netherlands is an exciting opportunity that allows us to more fully leverage our scale, experience, and operational capabilities in Europe for the benefit of both the Company and the KFC brand. We believe there is substantial opportunity for restaurant growth in the Netherlands, given KFC’s low penetration rate relative to developed markets and other Quick Service Restaurant brands.”