Priszm to shed restaurants

According to a news report from www.thestar.com, “A major Canadian operator of KFC, Taco Bell, Pizza Hut and Long John Silver’s fast-food restaurants says a decision to shed a third of its outlets is in response to rising costs and marketing missteps – not growing consumer distaste for less-healthy foods such as fried chicken, pizza and tacos. But not everyone is convinced.”

“Priszm Income Fund, which owns 484 outlets nationwide, yesterday unveiled a massive restructuring plan that includes closing 25 restaurants, selling 120 others and a temporary slashing of distributions to the fund’s unitholders to three cents from 10.67 cents previously,” said the story. “The drastic moves were revealed alongside a 10 per cent drop in third-quarter earnings to $4.6 million, or 28 cents per unit, from $5.1 million, or 33 cents. Sales at outlets open longer than one year were down 4.7 per cent in the most recent quarter as national KFC promotions failed to drive demand to anticipated levels, Priszm said. Overall sales, meanwhile, sagged 4 per cent to $122.4 million.”

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