Coca-Cola to Revert Back the Distribution in the U.S. to Franchise system

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Doing this will help the company to get out of a capital-intensive, low return of investment business of providing cans and bottle of sodas to restaurants, grocery stores and vending machines. This positive move and a beyond the expectation quarterly profit has rendered into an increase in the price of shares of Coca-Cola by as much as 6 percent.

Bottling operation in the North America was acquired by both PepsiCo Inc and Coca Cola back in 2010. The move was made to cut down costs, speed up innovation and turn wound a declining market with more and more health-conscious consumers giving up sodas and/or opting out for healthier drinks.

 

On Tuesday, Coke announced that the company would quickly return to being a franchise model of operation in the United States where independent companies will be given the duties to supply drinks to the local restaurants, stores and so on.

CEO of Coke, Muhtar Kent termed this change as a part of an evolution.

 

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