that the stores were not "cost efficient."23 In addition, they were charging too much. They could over-charge and the consumer would never notice, because of inflation. Inflation was rising avery day, so consumers lost sense of the prices. Consumers could never make a wise decision. However, in 1994 the environment was beginning to change. In June of 1994, the government instituted the Plano Real, inflation began to slow down. "The new currency Real was created and it had the same value as the dollar. The government would not allow that value to change. As a consequence inflation dropped from an annual rate of 4,060% in the third quarter of 1994 to 33.4% by September 1995".24 Pizza Hut had many problems in the first six months. Managers were very independent without any control from abroad. Now they had to adopt Pizza Hut's control process. As a consequence managers ended up revolting. They did not want to manage differently and have to be held responsible for their actions. During negotiations franchises did not show the the real costs and number of employees.25 So costs were a lot higher than expected. Another problem faced by Pizza Hut's management was inflation. When they had high inflation, there were some tricks used to increase profit. The following example is a good illustration: "Pizza Hut used to collect sales immediately, since the stores operate on a cash and carry basis, and delay the payment of supplies, thereby allowing them to pay for supplies with inflated sales revenues."26 Mall leases were based on 6% of sales and were delayed 30 to 45 days, so they used "inflated revenues" to pay for the leases. In other words, with inflation under control, their expenses went up 30 to 45%.27 In addition, consumers were able to make decisions based on market research. They were now able to compare prices and detect business that were not being fair with their prices. PRI (PepsiCO Restaurants International) was created...
