Written on the 21 November 2016 by Lin Evlin

EAGLE Boys founder Tom Potter (pictured) has predicted it will be "groundhog day" for the failed business rebranded as Pizza Hut.

Both pizza chains have been dominated by rival Domino's and Potter cannot see the situation changing, even merged under new owner Allegro Funds.

"Pizza Hut has run this business backwards for the last 30 years. They ran it so badly that they sold it to a fund manager. You have to ask yourself: if Pizza Hut can't make it work, how is somebody else going to be able to do it," Potter tells Business News Australia.

Potter, who sold Eagle Boys to Brisbane-based NBC Capital in 2007, says Allegro has no experience running a food business, and the three executives that have come from McDonalds to run the business have no pizza experience.

"The big question is, what is (Pizza Hut) going to do differently to get them back in the market? They just have the same old product and confusing price programs, I just think this is going to be groundhog days for the franchisees."

Currently, the plan is to rebrand more than 50 Eagle Boys stores to Pizza Hut, and the first was opened yesterday in Sydney's northern beaches suburb of Collaroy on Thursday.

The Eagle Boys Group plunged into voluntary administration in July and closed all its corporate owned stores as it caved to financial pressures in a fiercely competitive fast food industry.

Pizza Hut Australia CEO, Lisa Ransom told The Sydney Morning Herald on Thursday: "We've been talking to both administrators of Eagle Boys, SV Partners, and the individual Eagle Boys franchisees over the last several weeks and we were able to come to a deal over the last few days."

In September, private equity firm Allegro took control of Pizza Hut Australia after purchasing the master franchisee licence from US parent company, Yum! Brands, for an undisclosed amount, and put three former McDonald's executives, Peter Rodwell, Lisa Ransom and Chris Leslie in charge.

Eagle Boys and Pizza Hut fell behind the curve as Domino's rolled out high-tech ordering systems. On Thursday it became the first pizza chain in the world to deliver pizza by drone.

"The other thing is that the delivery market has got a whole lot harder because of UberEATS and Deliveroo. Originally, there was a whole section of the market that said, if I'm going to get delivery, it's going to be pizza. Now they are saying, if we are going to get delivery, it's going to be UberEATS or Deliveroo and I can have whatever I like," says Potter.

Pizza Hut hopes to have about half of its Eagles Boys stores operating under its brand by Christmas, with the rest to follow in 2017.

Only about 50 of the 110 active Eagle Boys shops will be rebranded.  It is believed that trade zone conflicts prevented Pizza Hut from acquiring some of the stores where they already have franchisees.  A number of the Eagle Boys stores closed prior to the merger deal being signed.

The inclusion of the 50 Eagle Boys stores will increase Pizza Hut's national network to 320 stores. This is still well below market leader Domino's, which has more than 600 outlets nationwide.

Author: Lin Evlin Connect via: Twitter LinkedIn





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