Franchise operator Sphera Franchise Group (SFG) is undergoing a readjustment process of the Pizza Hut network in Romania, the only brand in its portfolio with a negative impact on the balance sheet. Although the restructuring has already led to the closure of several units, the group’s executive team conveys a firm commitment to its first location on the local market—the restaurant near the Sheraton Hotel in central Bucharest—which is set to be modernized.
In a discussion with Profit.ro, Valentin Budeș, CFO at Sphera Franchise Group, specified that the flagship restaurant in the Piața Romană area, operating for over a quarter of a century, will remain a premium location in the portfolio. The network optimization process included consolidating the Pizza Hut Delivery division into physical restaurants to eliminate unnecessary costs. The turnaround strategy comprises three stages: returning the brand’s contribution to a positive trend, stabilizing the business at breakeven, and maximizing margins. The brand’s local decline is attributed to a combination of factors, including the disruption caused by the diversification of delivery services.
Internationally, Pizza Hut has been considered the weak link in the Yum! portfolio, according to analyst Neil Saunders from GlobalData Retail. Yum! decided to sell the brand, with operations outside mainland China being acquired by the LongRange Capital fund for approximately EUR 1.316 billion (USD 1.5 billion), and those in China by Yum China for EUR 1.053 billion (USD 1.2 billion).
Frequently Asked Questions
Why is Sphera restructuring Pizza Hut in Romania?
Pizza Hut is the only brand in Sphera’s portfolio with a negative balance sheet impact, prompting closures and delivery consolidation to reach profitability.
Will the main Pizza Hut restaurant in Bucharest remain open?
Yes, Sphera confirmed a firm commitment to modernize its flagship location near the Sheraton Hotel in Piața Romană, operating for over 25 years.
What strategy is being implemented to recover the brand?
The strategy involves reversing the negative trend, stabilizing the business at breakeven, and maximizing profit margins by consolidating delivery into dine-in restaurants.