After Past Decade’s Failure, KFC Once Again Tries to Win Brazilians

KFC tries again to win Brazil KFC first tried to establish itself in Brazil during the 1990s. That attempt, however, was a failure and from that time only four restaurants have survived, all of them in Rio de Janeiro. Now the American fast-food company is again trying to get a piece of the Brazilian market.

This time it will count on the help of Brazil Fast Food Corporation (BFFC), a company with the decades of experience in Brazil, which manages the Bob's fast-food chain.

The first time around, KFC was owned by Pepsi. Today, the company belongs to Yum! Brands, a multinational that also owns Taco Bell and Pizza Hut.

Negotiations between BFFC and Yum lasted five months. KFC will be investing about US$ 2 million in new stores and BFFC will be free to open KFC franchises in all of Brazil's 26 states.

BFFC is the owner and operator of the 534-outlets Bobs chain, the second largest hamburger fast-food chain in Brazil after McDonald's. Yum! Restaurants International, a subsidiary of Yum! Brands, Inc. has over 34,000 restaurants around the world.

Under terms of the mutual agreement, Brazil Fast Food – through its recently formed holding company, 22N Participações Ltda. – will assume operational control of KFC's four company-owned and operated restaurants in Rio de Janeiro as a Yum! franchisee.

A new subsidiary, wholly owned by 22-N Participações Ltda., has been set up for this special purpose. In addition, Brazil Fast Food, through its holding company, will be responsible for developing and expanding the KFC chain throughout Brazil by opening new restaurants -company-owned and franchised – and managing the chain's Brazilian operations.

Wagner Rodrigues, Executive Officer of Yum! Restaurants International in Brazil, commented on the agreement. "With Brazil Fast Food's extensive knowledge of the Brazilian fast food market, we believe that it is the perfect company to entrust with the continued growth, development and consolidation of the KFC brand in Brazil."

Ricardo Figueiredo Bomeny, Chief Executive Officer of Brazil Fast Food Corp., also commented, "KFC is a powerful brand with a significant presence throughout the world, and we are honored to have been chosen by Yum! Brands to help them achieve their long-term expansion goals in Brazil's fast food market.

"We consider this an excellent opportunity to leverage our expertise in a way that complements our core business and provides us with an additional revenue stream.

"For 2007, we estimate that the revenue generated as a result of this mutually beneficial agreement will boost our Company's restaurant sales by approximately 10%. With our high level of commitment to and enthusiasm for this new venture, we believe that, over the long term, we will be able to generate progressively greater revenue as a result of this agreement."

Yum! Brands Inc., based in Louisville, Kentucky, is the world's largest restaurant company in terms of system restaurants with over 34,000 restaurants, which includes over 2,000 licensed restaurants, in more than 100 countries and territories.

Four of the company's restaurant brands – KFC, Pizza Hut, Taco Bell and Long John Silver's – are the global leaders of the chicken, pizza, Mexican-style food and quick-service seafood categories, respectively.

Yum! Brands is the worldwide leader in multibranding, which offers consumers more choice and convenience at one restaurant location from a combination of KFC, Taco Bell, Pizza Hut, A&W or Long John Silver's brands.

The company and its franchisees today operate over 3,400 multibrand restaurants. Outside of the U.S. in 2005, the Yum! Brands' system opened about three new restaurants each day of the year, making it one of the fastest growing retailers in the world.

Pizza Hut, one of Yum! Brands' flagship restaurant brands, has operated in Brazil for more than 15 years.

KFC Corp., a subsidiary of Yum! Brands, Inc., is the world's most popular chicken restaurant chain. There are more than 13,000 KFC outlets in more than 80 countries and territories around the world, serving some eight million customers each day. The first KFC restaurants were opened in Brazil in 2003.

Brazil Fast Food Corp. owns and operates, both directly and through franchisees, the second largest chain of hamburger fast-food restaurants in Brazil, through its wholly owned subsidiaries, 22N Participações Ltda. and Venbo Comércio de Alimentos Ltda.

Brazil Fast Food Corp. conducts business in Brazil under the trade name "Bob's." As of Mar. 28, 2007, the Company had 534 points of sale, which includes traditional restaurants, kiosks and re-locatable trailers.

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