Burger King to open 12 outlets in India over three months

Date : Oct 28, 2014

New Delhi: American fast food chain Burger King will open 12 outlets in India over the next two-three months, six each in Delhi and Mumbai. According to people familiar with the burger chain’s plans, the brand will roll out its first outlet in the capital in less than a month at a prominent mall in South Delhi, followed by the rest in the National Capital Region (NCR) and Mumbai. “The initial plan is to roll out a store every few weeks to keep the momentum going,” said a person with direct knowledge of the matter who declined to be named. With an investment of up to Rs.2-2.5 crore per outlet, Burger King is eyeing other potential locations like Pune, Chennai and Bangalore. To be sure, Burger King is launching in Asia’s third largest economy where a spurt in disposable incomes has led to a rise in out-of-home food consumption, pushing chains such as Domino’s, McDonald’s and KFC to expand. In 2013, private equity company Everstone Capital Management announced a joint venture with Burger King Corp., famous for its Whopper burgers, to establish its presence in India. Everstone owns 89% stake in the venture with 11% controlled by Burger King. For now, the food chain is looking at a company-owned and company-operated model for its stores, which will be located in food courts and high-street locations. “That’s how Burger King will develop the India market for the first few years....without taking the franchise route,” the person quoted above added. According to a September report by real estate consultancy CBRE South Asia Pvt. Ltd, international food and beverage outlets—both fast food and fine dining—have continued to expand in 2014. The first half of the year saw key malls in Delhi and Gurgaon get on board food and beverage operators such as Fatburger and Johnny Rockets. Largely under-penetrated by global food brands, the Indian market offers a significant opportunity for growth, the report added. However, location is critical for food chains. “The biggest opportunity in the QSR (quick service restaurant) market is real estate. In the longer run, it is best to block the high-footfall locations,” said Gaurav Marya, chairman, Franchise India Holdings Ltd, a franchise solutions company. In the last 12 months, Franchise India has brought American fast food chain Fatburger and Carl’s Jr into the country. Marya estimates that the top 12-14 cities have roughly 3,000 locations that are suitable for fast food and coffee chains. Burger King has spent the last six to eight months working on its menu that will result in some India-specific modifications in dressings for Indian consumers. The company will start with its vegetarian and chicken burgers, and subsequently add lamb burgers to its menu. As of 31 December, the Burger King system consisted of 13,667 restaurants in 95 countries and US territories. The world’s second largest fast food hamburger chain started as a single restaurant in 1954 in Miami, Florida.

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