KFC operator Collins Foods signs deal to exit Taco Bell franchise in Australia

Taco Bell is set to remain in Australia under a new owner after Collins Foods struck a deal with the Mexican-themed food chain’s US parent, Yum Brands, and its local partner to sell 20 stores.

ASX-listed Collins Foods owns 27 Taco Bells, including all four in WA, and is the nation’s biggest KFC operator with nearly 300 restaurants.

Collins Foods last April announced it would dump its Taco Bell chains, leaving its future in Australia uncertain, as it struggles with key rivals like Guzman Y Gomez.

But on Tuesday, Collins Foods revealed it would transition 20 of the 27 Taco Bells it currently operated to an affiliate of Yum Brands and Restaurant Brands Australia.

Collins Foods said the move would allow it to sharpen its focus on its core brand KFC in Australia and Europe, particularly Germany.

Collins Foods will shut the seven Taco Bell outlets not included in the deal — six in Queensland and one in Victoria. The closures are set to cost the company between $1 million and $2m.

Restaurant Brands is a long-term global partner of Yum Brands, and currently operates Taco Bell restaurants across NSW, as well as in several international markets. The company also operates about 80 KFC outlets in Australia.

“We strongly believe in this market and are excited about the future with a clear focus on growing the brand to bring more Taco Bell restaurants to more Australians,” Taco Bell Australia general manager David Mantellini said.

Taco Bell has had a rocky history in Australia, marked by multiple attempts to establish a presence.

The chain first launched in Australia in 1981 but faced a lawsuit from a local restaurant named Taco Bell’s Casa over the name. Taco Bell attempted to launch again in 1997 but failed after eight years. Collins Foods took over in 2017.