KFC announced Wednesday that it will acquire 218 franchised restaurants in the U.K. and Ireland, with plans to jumpstart growth in the countries.
The stores will be transferred from EG Group, a conglomerate of grocery and merchandise, foodservice, and fuel locations.
KFC’s 1,040 stores in the U.K. and Ireland have seen 5 percent same-store sales growth and a 7 percent increase in system sales thus far in 2023. In the U.K. alone, system sales lifted 10 percent in Q3 and 8 percent year-to-date. Of those 1,000-plus restaurants, 50 are managed by KFC.
Since 2018, the chicken giant has opened 200 locations in the two countries. The goal is to open another 500 units across the markets by 2030. KFC Division CEO Sabir Sami said the U.K. business is close to $2.2. billion in sales (converted from euros).
“The KFC business is a powerhouse for Yum! globally and the UK and Ireland is one of our strongest markets,” Sami said in a statement. ” … We’re pleased to add these restaurants to our equity portfolio, in a market where we are well placed to drive strong growth while also making further digital and strategic progress.”
More than half of the 218 soon-to-be-acquired stores are drive-thrus. They also come with approximately 7,800 employees. With the portfolio addition, KFC said it will focus on “deploying its digital strategy to drive higher unit volumes and market share growth.”
“EG has played an important role in helping KFC expand its footprint across the U.K. and Ireland, and the KFC brand has been a big part of EG’s own growth in recent decades,” Meg Farren, managing director of KFC U.K. and Ireland, said in a statement. “With the market for high-quality, great-tasting chicken growing all the time, we see a big opportunity to capitalize on our leadership position and to unlock new value for all our stakeholders in the UK and Ireland, especially our customers and the communities we’re so proud to serve. On behalf of all of us on the management team, I want to welcome EG’s KFC restaurant team members even closer into the KFC family.”
Yum! anticipates finalizing the transaction by the end of the first half of 2024. The transaction will be funded from cash flows and is expected to have an immaterial impact on the company’s 2024 financial results.
KFC has operated in the U.K. market since 1965, 13 years after the brand was founded.
The brand’s international same-store sales grew 7 percent in Q3 and 11 percent year-to-date. Globally, KFC opened 664 gross new restaurants across 57 countries in the third quarter.