US franchise giant Flynn Restaurant Group orders in Pizza Hut

US-based fast food franchise owner Flynn Restaurant Group has bought Pizza Hut Australia from private equity firm Allegro Funds.

US-based fast food franchise owner Flynn Restaurant Group has bought Pizza Hut Australia from private equity firm Allegro Funds.

Flynn is the largest restaurant franchise operator in the US with a portfolio of more than 2350 restaurants, including 926 Pizza Huts. The deal will see Flynn buy Pizza Hut Australia, which includes 260 restaurants. The deal represents the group’s first international expansion beyond its US operations.

The acquisition follows the turnaround of Pizza Hut Australia under the ownership of Allegro and chief executive Phil Reed. Mr Reed, who has delivered 51 consecutive months of same-store sales growth, will continue to run the business.

Pizza Hut Australia generated sales of just under $250m in the 2021 calendar year.

Flynn co-chief operating officer Ron Bellamy said Pizza Hut Australia represented the ideal opportunity for Flynn to expand internationally, while at the same time growing as a brand.

“Our immediate focus will be to work with the team to determine how we can best leverage our broader scale and capabilities to support the continued success trajectory of Pizza Hut in Australia,” he said. “Over time, Flynn looks forward to expanding its global reach further with new concepts and markets.”

The acquisition has received Foreign Investment Review Board approval and is subject to consent by Pizza Hut global brand owner Yum! Brands, and is expected to be completed by the end of the month.

The sale came after Allegro was in exclusive talks to sell its Pizza Hut business to an offshore buyer in 2021, but the deal was dropped, sources say. Allegro bought the master franchisee ­licence for Pizza Hut in Australia in 2016 with a local management buy-in team.

It purchased the failed pizza chain Eagle Boys Pizza around the same time.

Pizza Hut has been a household name in Australia since the early 1970s. It was one of the first pizza companies to offer home ­deliveries in Australia.

It has 5.7 per cent of the pizza restaurant and takeaway market share in Australia, behind Domino’s Pizza with 27.4 per cent, according to IBISWorld.

The deal comes as Domino’s this week ditched its unpopular delivery service fee in Australia.

Domino’s, the nation’s largest pizza chain with more than 3700 stores across Australasia, Asia and Europe, on Tuesday announced it was removing its 7 per cent delivery service fee, which it said was introduced in July last year to cover the rapidly increasing costs of operating its delivery business. The fee added about $2 to an average $30 pizza delivery purchase.

“We have made the decision to remove this fee because we want more customers to be able to enjoy the convenience of delivery,” Domino’s Australia and New Zealand CEO Josh Kilimnik said.

Domino’s shares closed 3.4 per cent lower at $45.75.