Pizza Hut agrees to buy Godfather's franchise

PIZZA RESTAURANT and delivery chain Pizza Hut has agreed to buy the fast-growing Irish pizza delivery franchise Godfather's, it is understood.

Pizza Hut and Godfather's yesterday declined to comment on the deal.

Until now, Pizza Hut has not been involved in the delivery business in the Republic, where it has eight restaurants, but the Godfather's deal will give it a ready-made channel for pizza delivery in the Republic.

Godfather's has 30 stores in Ireland, with 16 of those in Dublin. The chain, which was started in 1996 by brothers John and Patrick Cronin with a single outlet in Rathfarnham, has expanded rapidly in recent years. The Cronin brothers are the only two directors of the company.

Godfather's specialises in producing pizzas using freshly made dough in stone ovens imported from Italy. Its holding company is in Leeson Street, Dublin.

Pizza Hut, the world's largest pizza restaurant chain, is owned by Yum! Brands. In Ireland, it is operated by MBCC Foods (Ireland), which also operates the KFC and Costa Coffee franchises in Ireland.

MBCC Foods' profits for the year ending January 31st, 2007, came to €143,607, according to documents filed at the Companies Office. The firm had a deficit in its shareholders funds of €389,890 and according to the accounts the company is reliant on the continued support of group undertaking and related parties.

The parent of MBCC is Tuli (Holdings) Ireland which is owned by the members of the Tuli family. The group's interest include the clothing retail business The Jean Scene (Ireland) and a property rental business B&R properties.

The group had a turnover of €43.5 million last year and made profit for the year of €1.2 million after paying dividends of €57,255.

The principle shareholders are Edinburgh-based Raju Tuli and Sundeep Tuli.

The two brothers are among Scotland's richest Asian businessmen having built up the The Jean Scene into one of the Scotland's cost successful retail businesses. They started the business with a £3,000 loan from their mother.

Pizza delivery and restaurants have been one of the fastest expanding segments of the Irish fast-food sector. Domino's Pizza has 34 stores in the Republic, Four Star Pizza has 31 stores across the Republic and Northern Ireland and Apache Pizza has 40 stores.

Sales growth at most of the major chains remains is in double-digits, despite the proliferation of outlets.

However, consumers have seen pizza prices rise over the past year as the cost of ingredients such as flour, mozzarella cheese and meat toppings have spiked dramatically as a result of soaring demand for dairy products from China and reduced global wheat supplies.