ALL ABOUT FRANCHISING

PIZZA HUT, INC.

BUSINESS DESCRIPTION
PHI's primary activity is the operation, development, franchising, and servicing of single-purpose Pizza Hut restaurants PHI's corporate parent is YUM! Brands, Inc. - (NYSE: YUM) is the world's largest pizza restaurant company with 6,200 restaurants in the US and more than 4,000 restaurants in 100 other countries. As the world's largest pizza company Pizza Hut has been the place families have gathered for 50 years.

MODE OF FRANCHISING

Offers different types of non-traditional concepts called License Concepts

"Pizza Hut Retail Snack Bars", "Pizza Hut Stadium and Arena Concession Stands", "Pizza Hut Hotel/Resort Pizza Kitchens", "Pizza Hut Recreation Centers", "Pizza Hut Institutional Kiosks", "Pizza Hut Airports/Tollways Concept" and "Pizza Hut School Commissary Concept

THE YUM! VALUE NETWORK

Brand Recognition Development Expertise Customer Attraction Access to Financing Competitive Advantage Solid Business Support Franchise Value System Quality On-boarding & Training Multi-Unit Growth Reliable Supply Chain Economic Stability Brands that Give Back to the Return on Investment Community

FINANCIAL & TRAINING ASSISTANCE

Financial Assistance: The franchisor does not offer, directly or indirectly, any arrangements for financing the initial investment or the continuing operation of the franchise. The franchisor does not guarantee the franchisees note, lease or obligation. Training and Assistance: The franchisor will provide Basic Operational Training to the franchisee (if the licensee is an individual) and your managers as needed at the Pizza Hut Express Training Center in Piano, Texas. In addition PHI will provide training for two "Pizza Hut Champions" from each Licensed Location before opening. A Pizza Hut Champion is a member of management who will be working at the Licensed Location on its work schedule. The franchisor also will provide periodic assistance and consultation in the proper operation of the concept, as reasonably requested.

TERRITORY & TERM OF AGREEMENT

Territory: The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees or licensees, from restaurants that PHI owns, or from other channels of distribution or competitive brands that the franchisor or affiliates control. Term of Agreement and Renewal: The term of the franchise is five years for each Licensed Location. PHI may agree to a longer term, but in no event will the Term end more than 10 years from the Starting Date. There is currently no option to renew.

OBLIGATIONS AND RESTRICTIONS

PHI recommends, but does not require the franchisee to personally supervise the Licensed Concept. 2 individuals as Pizza Hut Champions for each Licensed Location. responsible for ongoing training, ensuring the quality of operations, visiting the Licensed Location at least biweekly. The Pizza Hut Champion most successfully complete PHI's training and must be certified by PHI as capable of functioning as a Pizza Hut Champion. All employees exposed to the Pizza Hut Information must sign a written agreement. The franchisee must sell only those products that PHI has approved for the Licensed Location in the area of the Licensed Location associated with the Licensed Concept and PHI's Marks.

Initial Investment: Hotel/Resort Pizza Kitchen

Name of Fee Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens Initial License Fee Real Estate Equipment and Smallwares Signage Remodelling and Construction Low $300 $10,000 Varies $20,000 Varies $2,000 High $600 $10,000 Varies $49,000 Varies $20,000

Inventory Additional Funds (3 months)

Marketing Fee Estimated Total (excluding real estate)

$225 $1,500
$1,000 $34,025

$2,100 $11,500
$2,000 $95,200

Initial Investment:
Retail Snack Bars
Name of Fee Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens Initial License Fee Real Estate Equipment and Smallwares Signage/Menu Boards Remodelling and Construction Inventory Additional Funds (3 months) Marketing Fee Estimated Total (excluding real estate) Low $300 $5,000 Varies $16,000 Varies $15,000 $980 $3,450 $1,000 $41,730 High $600 $15,000 Varies $75,000 Varies $66,000 $2,620 $9,230 $2,000 $170,450

Initial Investment:
Recreation Center
Name of Fee Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens Initial License Fee Real Estate Equipment and Smallwares Signage/Menu Boards Remodelling and Construction Inventory Additional Funds (3 months) Marketing Fee Estimated Total (excluding real estate) Low $300 $5,000 Varies $16,000 Varies $5,000 $735 $3,450 $1,000 $41,485 High $600 $10,000 Varies $66,000 Varies $16,000 $1,960 $9,230 $2,000 $164,790

Initial Investment:
Institutional Kiosk
Name of Fee Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US cit. Initial License Fee Real Estate Equipment and Smallwares Signage Remodelling and Construction Inventory Additional Funds (3 months) Marketing Fee Estimated Total (excluding real estate) Low $300 High $600

$5,000 Varies $16,000

Varies $5,000 $385 $1,600 $1,000 $29,285

$10,000 Varies $75,000

Varies $16,000 $2,755 $11,500 $2,000 $117,855

Initial Investment:

Stadium and Concession Stand (Per Unit)

Name of Fee Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens Low $300 High $600

Initial License Fee Real Estate Equipment and Smallwares Signage/Menu Boards Remodelling and Construction Inventory Additional Funds (3 months) Marketing Fee Estimated Total (excluding real estate)

$5,000 Varies $38,500 Varies $15,000 $600 $2,538 $1,000 $62,938

$10,000 Varies $103,000 Varies $70,000 $4,000 $17,300 $2,000 $206,900

Initial Investment:
Airports/Tollways
Name of Fee Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens Low High

$300 $5,000 Varies $28,500 Varies $10,000 $400 $1,600 $1,000 $46,800

$600 $10,000 Varies $77,000 Varies $66,000 $2,750 $11,500 $2,000 $169,850

Initial License Fee Real Estate Equipment and Smallwares Signage/Menu Boards Remodelling and Construction Inventory Additional Funds (3 months) Marketing Fee Estimated Total (excluding real estate)

Initial Investment:
School Commissary
Name of Fee Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens Low $300 $5,000 Varies $65,000 Varies $5,000 $2,500 Varies $1,000 $78,800 High $600 $10,000 Varies $195,000 Varies $30,000 $14,800 Varies $2,000 $252,400

Initial License Fee Real Estate Equipment and Smallwares Signage/Menu Boards Remodelling and Construction Inventory Additional Funds (3 months) Marketing Fee Estimated Total (excluding real estate)

FRANCHISING STRATEGY: Training and Support

Extensive training to provide franchisee with the knowledge to operate their store Access to proven systems, manuals and tools to build know-how Pizza Hut provides each franchisee with a Franchise Business Coach who provides individual business consultations and has a support team of departmental experts based at our Restaurant Support Centre National advertising campaigns including TV, radio and digital media Ongoing New Product Development

FRANCHISING STRATEGY: Training and Support

Financial control over the business Supply chain giant with the buying power of over 6000 restaurants in Australia, NZ and Asia Competitive start up costs Site identification and leasing assistance "Turn key" developments Comprehensive 8 week On-boarding program 2 weeks of one on one operational support upon the opening of the outlet

FRANCHISING STRATEGY: Getting Started

Complete an on-line expression of interest (EOI). The EOI will be assessed and franchisee will receive an information pack, confidentiality agreement and a link to an on-line application form An initial phone screening and Q&A session will be conducted to discuss the application. Meet with Franchise Recruitment Manager to review the application and the opportunities that exist. Following this franchisee will receive a Franchise Information Pack to review and commence preparing a Business Plan.

FRANCHISING STRATEGY: Getting Started

Quantify the financial position, verify assets and complete the Business Plan. An On the Job Evaluation' (OJE) including a brand orientation will be arranged to take place over two days in one of our Franchise Training Stores. Meeting with the respective State Manager to review franchisees Business Plan. Final Interview - Panel Interview with Heads of Operations, Development & Human Resources where the application and Business Plan will be approved.

FRANCHISING STRATEGY: Getting Started

Funding confirmation to be submitted, this should cover construction; initial fee; in addition to working capital. Approved subject to the completion of training. Letter of Intent issued and an invoice for the fully refundable deposit. Commencement of Operations Training - 8 week program Construction completed - open store

FRANCHISING STRATEGY: Getting Started

FRANCHISING STRATEGY: Getting Started

FRANCHISING STRATEGY: Getting Started

franchisee must apply direct to their franchising office based in the US. PHI uses sleek wooden furniture, ambient lighting, and providing a warm and very sophisticated atmosphere which gives you a one of a kind experience.

FRANCHISING STRATEGY: Benefits

Brand Recognition Customer Attraction Competitive Advantage Franchise Value System, Multi-Unit, Growth Economic, Stability Brands Development Expertise Financing Solid Business Support Quality On-Boarding & Training Reliable Supply Chain Return on Investment.

FRANCHISING STRATEGY: What Yum! Brands is looking for in Franchisees?

Yum! Brands had been so successful yet wishes not to stop there, they are offering every individual who meets these requirements to join their business venture and look for better ways to improve.

FRANCHISING STRATEGY: How Much will I need to open up a Franchise? Details are to be further discussed if you were chosen to be a part of their growing empire after application, but do note that you should have at least $360,000 in liquid assets to be able to start your own Franchise.

FRANCHISING STRATEGY: Does Yum! Brands allow corporations to Franchise?

Yes they do, but you should have the majority share of the said corporation and the minimum liquid asset requirement should be met.

STRATEGY FOR EXPANSION:

The fast food franchise continues to grow through investment in new stores, marketing and training new franchisees Pizza Hut is well known for its great tasting pizza and great advertising, we also have first class franchisees. We believe that we work harder of our franchisees makes for a successful combination to continue as an icon in the Australian pizza category, Mr. Whitlow explained.