Restaurant Brands has signed a conditonal agreement to acquire the seven Carl's Jr. stores in Auckland currently owned and operated by Forsgren NZ Ltd.
This will bring the total number of Carl's Jr. store in New Zealand owned by Restaurant Brands NZ Limited to 16, resulting in the company being the sole operator in the New Zealand market.
The agreement is for a cash purchase of the seven stores, by way of an asset acquisition, for a total considertion of $10.5 milliom (plus a payment for stock). Restaurant Brands will offer employment to the existing Forsgren employees.
The acquisition is subject to a number of conditions (including approval of CKE Restaurants Holdings, Inc. (CKE), the Carl's Jr. franchisor, and assignment of leases). Settlement is expected to occur in mid-November.
Restaurant Brands seet the aquisition as a strategic opportunity to add critical mass to its Carl's Jr. chain and use volume to further leverage marketing and supply chain opportunities.
Restaurant Brands has also signed a Master Licensing Agreement with CKE which allows Restaurant Brands to sublicense Carl's Jr. stores in New Zealand to third party franchisees.
The agreement, which is effective immediately, allows Restaurant Brands to more quickly increase market penetration. Licensing smaller franchisees to operate the Carl's Jr. brand in locations where they can operate the business effectively will allow more rapid expansion of the Carl's Jr. store network. It is envisaged the model will work in much the same way as the successful mixed ownership model Restaurant Brands has set up with its other brands.
Restaurant Brands will recieve a share of royalties and fees in return for the development and ongoing supervision of sublicensed stores.