Yum! Brands (YUM) has entered into a binding agreement with Australia's Collins Foods to open Kentucky Fried Chicken restaurants in Germany, Collins said in a statement Tuesday.

Collins said that the KFC brand in the European country is "underpenetrated" and plans to open between 40 and 70 new KFC restaurants over the next five years.

Yum! Brands has granted Collins an exclusive period to open and operate KFC restaurants in North Rhine Westphalia and Baden-Wurttemberg, which account for around 35% of the country's population, according to the statement.

Further, Collins said it is exiting its Taco Bell business and aims to transition it to new ownership in the next 12 months.