The Management Board of AmRest Holdings SE (“AmRest”, the “Company”) informs about signing on August 15th, 2016 the Master Franchise Agreement (“MFA”) and Development Agreement (“DA”) (collectively: the “Agreements”) with Pizza Hut Europe Sarl (US Branch) (“PH Europe”). The Agreements determine the rights and license to develop, own and operate Pizza Hut restaurants in countries of Central and Eastern Europe: Poland, Czech Republic, Hungary, Bulgaria, Serbia, Croatia, Slovakia and Slovenia. The provisions of the Agreements will apply from October 1st, 2016.
According to the MFA AmRest, as a master-franchisee, will have the right to granting the license to the third parties to operate Pizza Hut Express and Pizza Hut Delivery restaurants (sub-franchise), while ensuring a certain share of restaurants operated directly by the Company.
The MFA was granted for initial period of 10 years with an option of further prolongations upon the fulfillment of certain terms and conditions.
The DA was concluded for a period of 5 years and will be prolonged for another 5 years on terms and conditions to be determined by the parties.
In order to facilitate the growth of scale of Pizza Hut business, PH Europe will introduce an incentive mechanism reducing certain fees incurred by AmRest under the MFA ("Reduced Fees"), provided that the Company meets certain development obligations specified in the DA.
Upon entry into force of the Agreements AmRest will be required to open and operate Pizza Hut Express and Delivery restaurants in accordance with the development schedule setting the minimum number of openings in the subsequent years of the Agreements’ term. If AmRest fails to meet the development obligations, PH Europe will have the right to increase the Reduced Fees and change the terms or terminate the MFA and/or DA. The Company's intention is to open about 300 Pizza Hut restaurants within 5 years.
In the opinion of the Management Board of AmRest there is a great potential for growing Pizza Hut brand in Central and Eastern Europe. Master-franchisee right will contribute to strengthening AmRest’s leadership position of restaurant operator in the region and drive the value creation for AmRest’s shareholders.
Art. 17 Sec. 1 of Regulation (EU) No 596/2014 of The European Parliament and of The Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC