Court rules for Pizza Hut, QSR Media story tendered as evidence
The pizza chain prevails in court, in a case filed against the chain by franchisees.
Last month, 80 Pizza Hut franchisees filed a court order against Yum! Restaurants Australia Pty Ltd. (Yum) to restrain the pizza chain's initiative to put a cap on pizza prices. The chain recently announced that it will now offer $4.95 pizzas.
Click here to read the complete court document from the Australasian Legal Information Institute
However, the court sided with Pizza Hut, noting that there has been a decline in the brand's overall profitability in the last few years and that it is only rational to act on it. A QSR Media story was tendered as evidence in the proceeding.
"We are please with (the) Federal Court ruling and are looking forward to a more competitive and exciting pizza market here in Australia," said Graeme Houston, Pizza Hut General Manager.
Jim Kartsounis, President of the Australasian Pizza Association, told the court: "While Yum may use the Reduced Price Strategy to increase overall sales of Pizza Hut products across Australia with a corresponding increase in Yum’s royalties, this increase would not necessarily translate to an increase in franchisee profitability due to the reduction in sale price and increase in cost of sales.
Graeme has explained that putting a high-quality, high-value competitive model in place has proven successful in the US and New Zealand markets.
Adding, "growing our customer base is our focus and by offering a simplified menu with all pizzas under $10 with no compromise on quality, we believe we have a winning formula."
