Australian restaurant operator Collins Foods is planning to withdraw from the Taco Bell business in Australia, shifting its focus towards the expansion of its KFC operations in Germany.
The company is in discussions with Yum Brands to transfer the licence for its 27 Taco Bell restaurants in Australia to a new owner.
Shares of Collins Foods has experienced a downturn, dropping by 2.7% to A$8.44, in contrast to a 0.4% increase in the broader market index, as reported by Reuters.
The move comes after the company reported a 2% decline in Taco Bell's revenue for the first half of fiscal 2025, highlighting pressures from Guzman Y Gomez, a rival in the Mexican food segment in Australia.
Guzman Y Gomez, which made its public debut on the Australian market in 2024, achieved 9.4% growth in same-store sales in the first half of the fiscal year while Taco Bell's same-store sales decreased by 0.3%.
Collins Foods has also agreed with Yum! Brands to increase the number of KFC outlets in Germany.
With only 16 of the 207 KFC restaurants in Germany under its franchise, Collins Foods sees significant growth potential, describing the market as underpenetrated.
The company is planning to launch between 40 and 70 new KFC locations up to 2030.
Collins Foods anticipates an impairment charge between A$25.5m and A$32.7m ($16.11m to $20.66m) related to its operations in the Netherlands.
Collins Foods is an Australian Securities Exchange-listed entity employing more than 20,000 people. In October 2024, the company appointed Xavier Simonet as its new managing director and CEO.
