The Management Board of AmRest Holdings SE (“AmRest”, the “Company”) informs about signing on May 23rd, 2016 the Binding Head of Terms (“HoT”) determining the key terms and conditions on, and subject to which, Pizza Hut Europe (“PH Europe”) would be willing to proceed with a potential transaction with AmRest whereby AmRest and PH Europe would enter into a Definitive Agreement, Master Franchise Agreement (“MFA”), Development Agreement (“DA”) and related International Franchise Agreements and Shareholder Deed(s) (collectively: the “Agreements”).
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 HoT AmRest, as a master-franchisee, will have the right to granting the license to the third parties to operate Pizza Hut restaurants (sub-franchise), while ensuring a certain share of restaurants operated directly by the Company.
The MFA shall be granted for initial period of 10 years with an option of further prolongation upon the fulfillment of certain terms and conditions.
Upon entry into force of the Agreements AmRest will be required to open and operate Pizza Hut 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 change the terms or to terminate the MFA or/and DA. The Company's intention is to substantially increase the presence of Pizza Hut brand in countries defined in HoT in coming years.
The Agreements shall be executed no later than June 30th, 2016. If the parties fail to execute the Agreements by that day, the HoT will terminate immediately.
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.