The Exodus of Pizza Hut UK and Its Success

There would always be a cloud of tensed feelings with all the uncertainties of a business that is undergoing restructuring. People in the organization from management to employees praying dearly for their employment status to be still part of the company after all has been said and done.

For Pizza Hut UK, nobody is more tensed than its finance director Henry Burts with the situation the company is facing, describing it as something fragile and must be tackled carefully with constant communication being the key component in managing the deal.

Burts mentioned about how Pizza Hut and its owner Yum! Brands had different business models that on a marketing and operations outlook would not be on the best interest of both entities. With profits and losses in review, the turnaround of the business is set to commence.

Posting £331 million in 2011 is a product of simplifying the process on exercising quality service that Pizza Hut is known for. From a long checklist, Pizza Hut reduced it to 5 steps in every component of the restaurant’s operations. Looking into selling the business, Pizza Hut still keeps in touch with Yum! to be part of the process in the development of negotiations and improving relations with the buyer of Pizza Hut.

It took 18 months before Yum! found a buyer in Rutland Partners, a private equity firm specializing on turnaround investments. With all the uncertainty looming, Birts met with the firm to open up both the equity’s views and as well as Pizza Hut’s and Yum! Brands’.

With the company on restructuring phase, a number of changes has taken place. The reports on its finances have been restructured bringing in more details aside from just profits and losses bringing updates from UK to the US and also to Rutland. Meetings are more formal bringing in a functional board consisting of Birts, former Yum! marketing director David Fitzjohn, Laura Ashley and Grand Metropolitan. The changes however brought in some difficulties to the brands owned by Yum! working on managing separate invoices that in Birt’s words are “fascinatingly tough”.

As the process went through, Rutland gets to own Pizza Hut UK acting as its franchisee and Yum! still owning its three original brands forming out a very clever solution without Pizza Hut voided of its identity.

Taking into accountability his decision to restructure and surrounded with people who are technically better at a turnaround phase, Birts’ plan ensured the profitability of Pizza Hut UK by being involved in most aspects of the program. Pizza Hut continues to profit from the turnaround being strong at all aspects of the business.

Posted by Diane Araga, on August 29, 2013 at 11:00 AM