Collins Foods (ASX:CKF) entered into a legally binding conditional arrangement to transition 20 of the 27 Taco Bell restaurants it currently operates to an affiliate company of Taco Bell, part of YUM! Brands, and Restaurant Brands Australia Holdings, which proposed to operate the business under a new partnership arrangement, according to a Tuesday Australian bourse filing.

The purchase price includes a nominal amount plus the value of stock and cash floats, with the new owners assuming the lease liabilities from completion for the 20 restaurants.

The seven remaining Taco Bell restaurants that are not transitioning will be closed in the coming weeks, per the filing.

Collins Foods will be paid for any net operating losses and necessary capital expenditure incurred for the 20 restaurants from Wednesday to completion, the filing said. It expects to incur one-off costs in relation to the closure of the seven remaining restaurants and other transaction costs of around AU$1 million to AU$2 million.

No further royalty or advertising contributions will be payable by the firm on any Taco Bell restaurant from Wednesday, according to the filing.