Pizza Hut franchisees to appeal failed class action bid

Posted by AFN Staff Writers on 28th September 2016
Pizza Hut

A group of Australian Pizza Hut franchisee owners are preparing to appeal their failed class action law suit against its former parent company, Yum! Brands.

In July 2015, a group of over 250 Pizza Hut franchisee owners filed a class action lawsuit against Yum! Brands after it instructed them to sell cheap pizzas in 2014 to compete against Domino’s.

Franchisees complained the pizzas, which they had to sell for AUD $4.95, did not allow for them to make a profit and some franchisees were forced to close their stores.

The class action was unsuccessful but according to Fairfax, they are now appealing the decision, a move which is being initially funded by the liquidator appointed to manage franchisees which closed after the $4.95 pizzas were introduced.

Earlier in September 2016, Australian private equity fund, Allegro, acquired the master franchise agreement for Pizza Hut Australia from Yum! Brands. At the beginning of this week it was reported that Allegro is in talks with Eagle Boys Pizza, which went into liquidation in July 2016, regarding taking over the business.

Over the past few years, Domino’s has become the takeaway outlet of choice for many Australians, with Roy Morgan Research recently revealing a sharp increase in its visitation rates, whilst Pizza Hut and Eagle Boys visitation rates both fell. Some analysts are however speculating that if Allegro is to acquire Eagle Boy’s it could shake up the Australian pizza industry by combining the two brands.

Domino’s Chief Executive Office, Don Meij, has previously said Domino’s is also interested in acquiring Eagle Boys.