Collins Foods has taken further steps to expand its outreach in Germany, having acquired eight KFC restaurant franchises.
Collins Foods is accelerating its plans to deliver greater scale in Germany and has signed a binding APA to acquire eight KFC restaurants in the state of Bavaria, from JJ Restaurant GmbH & Co. This acquisition will facilitate the expansion of the German DAs, increasing the targeted number of restaurants planned for development.
The acquisition and expansion of the German DAs are consistent with the Company’s previously announced strategy to establish Germany as its second strategic growth pillar. In the short term, the acquisition will deliver greater scale with a near 50 percent increase in the Company’s German portfolio while increasing restaurant development opportunities through the state of Bavaria, one of the wealthiest and most populous states of Germany.
Collins Foods has also signed a revised CFA for the Netherlands, enabling the Company to sharpen its focus on operational performance and drive profit improvement in the Dutch market.
“There is a significant growth opportunity for Collins Foods in the German market, and we are pleased to be executing on our expansion in a disciplined manner. The KFC brand has substantial potential in Germany with approximately a fifth of the store footprint of the largest competitor, McDonald’s. Despite lower restaurant density, KFC enjoys strong brand awareness and consumer appeal in Germany, supporting a compelling opportunity to expand our market presence,” said Xavier Simonet, Managing Director & CEO.
“Pleasingly, the acquisition of a high-quality KFC portfolio in Bavaria, centred around Munich, will provide us with a platform to expand in one of Germany’s most populated and wealthiest states. These restaurants will bring us immediate scale and importantly, create a strong foundation for accelerated development. The acquisition meets the financial hurdles that guide our investment decisions, with the network to be acquired operating at higher margins than our existing German restaurants.”
Simonet said the revised German DAs will support development in the states of North-Rhine Westphalia, including the cities of Düsseldorf and Cologne, and Baden-Württemberg, including the city of Stuttgart, as well as expansion in Bavaria.
“These three states together account for more than half of Germany’s 83 million population and are amongst the most prosperous states,” he said.
“The updated Netherlands CFA brings our responsibilities into closer alignment with our other operating markets and will enable us to focus more sharply on improving sales and profitability across our network.”
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