(YUM) Priszm Income Fund Extends Deal with Yum! Brands

November 30th, 2009

Priszm Income Fund recently announced its agreement with Yum! Restaurants International to renew and extend franchise contracts covering KFC, Taco Bell and Pizza Hut restaurants at various locations in Canada.

Priszm Income Fund holds nearly 60% interest in Priszm Limited Partnership, which owns and operates more than 400 fast food restaurants in seven provinces in Canada. Of these restaurants, 120 restaurants meet the current standards of Yum! Brands Inc. (YUM).

The agreement entitles Priszm to use the KFC, Taco Bell or Pizza Hut trademarks for another 10 years at 69 of 120 restaurants until 2019.

Priszm Income Fund has also reached an agreement with Yum! on the renewal terms for 10-year franchise contracts of 75 additional Canadian restaurants. The franchise term of these restaurants ends in 2020 and the renewal of these restaurants will necessitate a capital outlay in the range of $14.3 million (C$15 million) to $15.7 million (C$16.5 million) in 2010.

Priszm also plans to close 16 poor performing stores before the end of 2010.

Yum! currently owns, operates, and franchises major fast food concepts, such as KFC, Pizza Hut, Taco Bell, Long John Silver’s and A&W All-American Food Restaurants in more than 110 countries. The company is the world’s largest restaurant company with about 36,628 restaurants at the end of the third quarter 2009.

Zacks Investment Research

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Read more on Yum! Brands, Priszm Income Fund at Wikinvest

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