<PAGE>
 
                                                                    EXHIBIT 10.1

                           FRANCHISE COMMITMENT LETTER




                                  July 17, 1998




P-PR Transfer, LLP
c/o John Bierbaum
3880 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402

Pepsi-Cola Puerto Rico Bottling Company
Carretera 865 Km. 0.4
Bo. Candelaria Arenas
Toa Baja, Puerto Rico 00949


Gentlemen:

This letter sets forth the significant terms of our new franchise relationship
for Puerto Rico as a result of the purchase today by P-PR Transfer, LLP, a
Delaware limited liability partnership, of a controlling equity interest in
Pepsi-Cola Puerto Rico Bottling Company (the "Bottler"), the Pepsi-Cola bottler
which produces, sells and distributes Pepsi-Cola, Diet Pepsi-Cola, Pepsi-Cola
Free, Diet Pepsi-Cola Free, Teem, Diet Teem, Mountain Dew, All Sport, Wonder
Kola, Mandarin Orange Slice, Diet Mandarin Orange Slice, Lemon Lime Slice, Diet
Lemon Lime Slice and Grape Slice soft drink products (together the "PCI
Products") in Puerto Rico.

I.       ISSUANCE OF EXCLUSIVE BOTTLING APPOINTMENTS

The Bottler and PepsiCo, Inc. (the "Company") hereby terminate the Exclusive
Bottling Appointments currently in effect which authorize the Bottler to
produce, sell and distribute the PCI Products in Puerto Rico, and all other
franchise agreements between the Bottler and the Company, including without
limitation, the Franchise Commitment Letter dated April 27, 1987 and all other
agreements relating to concentrate pricing or marketing funding. Neither party
shall have any liability to the other party as a result of the termination of
said Exclusive Bottling Appointments and related franchise agreements.
Simultaneously with the execution and delivery of this Franchise Commitment
Letter, the Company shall issue to the Bottler new Exclusive Bottling
Appointments (the "Appointments") in the form attached hereto as Exhibit I which
will exclusively authorize the Bottler to produce, sell and distribute the PCI
Products in Puerto Rico upon the terms and conditions set forth therein.
<PAGE>
 
II.      CONCENTRATE PRICING

The Bottler shall purchase concentrate for the PCI Products from the Company or
its subsidiaries at the same standard price per Unit which is in effect for the
Pepsi-Cola bottlers in the United States.

The initial price per concentrate Unit and the basic terms of purchase are set
forth in Exhibit II attached hereto.


III.     MARKETING

         (a)      1998 and 1999.

During the calendar years 1998 and 1999 the Bottler and Pepsi-Cola International
("PCI"), the Company's international soft drink division, shall spend the
amounts towards cooperative marketing funds to support sales of the PCI Products
which are set forth in Exhibit III attached hereto. As described in Exhibit III,
PCI will be contributing a significantly high percentage of these marketing
funds during 1998 and 1999. For purposes of determining the amount to be spent
over the remaining portion of the 1998 calendar year, the amount spent by the
Bottler and PCI since January 1, 1998 for these marketing purposes shall be
taken into account.

PCI and the Bottler shall change the purposes and amounts for the marketing
funds set forth in Exhibit III only by mutual written agreement.

(b)      2000 and After.

For the year 2000 and all years thereafter during the term of the Appointments,
PCI shall contribute up to 40% of Concentrate Sales (defined below) and the
Bottler will contribute 20% of Concentrate Sales toward cooperative marketing
funds to support sales of the PCI Products in Puerto Rico. The term "Concentrate
Sales" shall be equal to the cash amounts actually received during the
applicable year by the Company (or its subsidiaries) from the Bottler for
concentrate purchases.

The cooperative marketing funds will be spent on brand image building expenses
in order to promote sales of the PCI Products in Puerto Rico. Before December 1
preceding each year during the term of the Appointments, the Bottler and PCI
shall agree on a cooperative marketing agreement in PCI's standard form which
will set forth the budget of the marketing spending programs for the following
year. These spending programs shall be consistent with the Marketing Spending
Categories described in the attached Marketing Support Deck attached as Exhibit
III.

At the end of 1999 PCI and the Bottler will review the business needs and
conditions to determine if marketing funds over the normal levels should be
continued.


                                        2
<PAGE>
 
IV.      BRANDS

The Bottler agrees to produce, sell and distribute in Puerto Rico the full range
of the PCI Products unless otherwise agreed by the Company. New brands of the
Company will be launched by the Bottler and added to the list of the PCI
Products upon the agreement of the Company and the Bottler.

The Bottler agrees that during the term of the Appointments it will not,
directly or indirectly (through any affiliated companies), produce, sell or
distribute in Puerto Rico any beverage products other than the PCI Products and
the following non PepsiCo brands: Welsh's Grape, Cristalia Water and Seagram's
tonic water, club soda and ginger ale. No other brands will be sold by the
Bottler without the prior approval of PCI, or failing agreement of PCI and the
Bottler as to the introduction of new brands, the approval of the Chief
Executive Officer of the Pepsi-Cola Company.

V.       PACKAGES

The Bottler agrees to sell the PCI Products in the following packages:

         10 oz nonreturnable glass bottles
         333 ml cans
         16 oz nonreturnable glass bottles
         20 oz PET bottles
         32 oz PET bottles
         1 LT PET bottles
         2 LT PET bottles
         Bag N Box
         Fountain Syrup

Any new package launch or package discontinuation for the PCI Products shall be
subject to PCI's prior written approval.

VI.      INVESTMENTS

The Bottler agrees that before the end of 1999 the Bottler will make the
investments for 1998 and 1999 which are described in Exhibit IV.

VII.     VIRGIN ISLANDS

The PCI Products are currently sold in the Virgin Islands (United States and
British) through local distributors, West Indies Corp. for the United States
Virgin Islands and Tortolo Importing Company for the British Virgin Islands, and
the PCI Products sold to these distributors are produced at the Company's owned
plant in Miami, Florida. If the rights of these distributors in the United
States Virgin Islands or British Virgin Islands become available during the term
of the Appointments, the Bottler shall have the right of first refusal to
purchase these distribution rights.


                                        3
<PAGE>
 
VIII.    GOVERNING LAW

This Agreement shall be governed by the laws of the State of New York, U.S.A.
All disputes arising in connection with this Agreement shall be finally settled
in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by three arbitrators. Arbitration shall take
place in New York, New York, U.S.A. in the English language. The arbitrators
shall decide by majority vote. The arbitrators shall also decide and fix in
their award which party or parties shall bear the arbitration costs. Each party
shall appoint one arbitrator, and these two arbitrators shall appoint the third
arbitrator, who shall be Chairman of the Arbitral Tribunal. If the two
arbitrators are unable to agree upon the nomination of the third arbitrator
within 30 days after their nomination, the third arbitrator shall be appointed
by the President of the International Chamber of Commerce. Judgment upon the
award may be entered in any court with jurisdiction.

If the foregoing is acceptable to you, please indicate your agreement in the
space provided below.

                                                    Very truly yours,

                                                    PepsiCo, Inc.

                                                    By:_________________________
                                                        Assistant Secretary

Accepted and Agreed to:

P-PR Transfer, LLP

By:_________________________


Pepsi-Cola Puerto Rico Bottling Company

By:_________________________



                                        4