More than $80 million. That's how much cheesed-off Pizza Hut franchisees are hoping to take the company for, after reigniting their bid for compensation from the fast-food giant, claiming they were forced to sell unprofitable pizzas.
About 200 franchisees from across the country have been fighting a long-running legal battle against the fast-food giant's American owner Yum!, accusing it of forcing dozens of mum-and-dad small business operators to shut up shop.
![Pizza Hut franchisees are hoping to take the company for $80 million.](/web/20170122030626im_/http://www.theage.com.au/content/dam/images/g/r/p/n/s/4/image.related.articleLeadwide.620x349.grpcmb.png/1475018230013.jpg)
At the heart of the battle is Pizza Hut's decision in 2014 to slash the prices of its pizzas to compete with rival Dominos, and sell its cheapest pizzas for just $4.95 (they are now $5).
Franchisees have told Fairfax it can cost as much as $5.50 to make the same pizza, once other costs are taken into account.
An estimated 90 per cent of franchisees claimed losses and business collapses as a direct consequence of the price cuts.
In 2015, more than 200 franchisees began a class action against Pizza Hut's then-owner Yum! Restaurants in 2015, claiming its aggressive pricing policies were forcing operators to the wall.
(Earlier this month, Australian private equity firm Allegro and three former McDonalds executives acquired the master franchisees licence from Yum! Restaurants.)
While the franchisees lost their Federal Court battle, they now have found a financial backer for their bid to appeal the ruling.
Bob Jacobs, a liquidator who was appointed to manage the affairs of four franchisees whose businesses went to the wall after Pizza Hut's American owners, Yum! introduced $4.95 pizzas, has taken the highly unusual step of coughing up $50,000 of his own dough to fund the initial stages of the appeal.
He will then look for litigation funding to help pay for the proceeding.
Mr Jacobs told Fairfax it was "unusual" for a liquidator to take the step of funding a court action, but said it could be the only way the franchisees and their creditors saw any money.
He said he had personally committed to paying the first $50,000 and was also seeking funding for the rest of the case - which could cost hundreds of thousands of dollars.
Adam Gordon, whose appeal for crowd-funding attracted Mr Jacobs' attention, was a franchisee before selling his two businesses last year and walking away with just $10,000.
He has so far raised a little more than $1500 on a Go Fund Me website, which he plans to donate to Mr Jacobs' appeal.
"This guy is a hero," Mr Gordon said. He's not a franchisee, he's a liquidator, but he can't turn away from what he's seen. When we thought every other avenue was exhausted, this guy has come down like a bloody angel."
Fairfax sought comment from Yum!