Under terms of the mutual agreement, Brazil Fast Food--through its recently formed holding company, 22N Participacoes 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 22N Participacoes 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, comments 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., says "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 percent. 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."