Collins Foods said on Tuesday it will hand over 20 of its 27 Taco Bell restaurants in Australia to an affiliate of Yum Brands and Restaurant Brands, taking a significant step toward a complete exit from the loss-making Taco Bell business in the country. The fast-food operator indicated the seven remaining Taco Bell locations will be shut in the coming weeks.
The transaction aligns with a previously announced strategy to divest Taco Bell operations in Australia and place greater emphasis on Collins' core KFC franchise across Australia and Europe, with particular attention to opportunities in Germany. Collins has described KFC as its largest source of revenue and has been reducing exposure to Taco Bell while redeploying resources to the fried chicken chain.
Under the terms of the deal, the buyer will pay a nominal purchase price and assume the lease liabilities for the 20 restaurants at completion. Yum Brands owns a portfolio of quick-service concepts including KFC, Pizza Hut and Taco Bell. Restaurant Brands, which had formerly been listed in New Zealand, was acquired last year by Mexico's Finaccess.
Analysts have generally viewed the transfer as modestly positive for Collins. Michael Toner, an analyst at RBC Capital Markets, said the move to transfer the 20 Taco Bell stores for a nominal sum is a slight positive. He also noted the heightened competition among quick-service restaurant operators for desirable sites and expressed optimism that Collins will be able to dispose of the remaining seven leases relatively cleanly.
Collins has been explicit about its expansion plans for KFC. Last April the company said it intended to open between 40 and 70 new KFC restaurants in Germany over a five-year period, describing the brand as under-penetrated in that market.
Recent performance figures underline the contrast between the two brands in Australia. KFC Australia reported interim revenue of A$563.8 million, while Taco Bell's revenue fell by nearly 4% for the half-year ended October 12, 2025.
Market reaction to the announcement was negative for Collins' listed equity. Shares fell 3.8% to A$8.450, marking their lowest level since June 24, 2025, as of 0032 GMT. The report of the transaction included the exchange rate of $1 = A$1.4620.
Summary of transaction mechanics and strategic focus:
- 20 Taco Bell restaurants are being transferred to an affiliate of Yum Brands and Restaurant Brands for a nominal price, with lease liabilities assumed by the buyers.
- The remaining seven Taco Bell locations will be closed in the coming weeks.
- Collins is shifting emphasis toward its KFC franchise in Australia and Europe, notably expanding in Germany with a previously announced plan for 40-70 new outlets over five years.