Burger King IPO proceeds to help set up new stores, repay term loan: Varman

Our plan is to open 700 restaurants by December 2026. Right now, we have 268 restaurants in India, says CEO Varman

Private equity major Everstone and US fast-food chain Burger King came together to launch the brand in India, in 2014. Since then, Burger King India — owned majorly by Everstone — has set up 268 restaurants and has plans to add more as it taps the food services potential. Rajeev Varman, chief executive officer of the IPO-bound company, spoke to Viveat Susan Pinto on the firm’s plans. Edited excerpts:

How did Burger King perform over the last eight months, during the pandemic?

Everything came to a standstill during the last week of March. Having said that, one of the striking things about the India shutdown and re-opening was that it was done very well. Whether the Central or state governments, they unlocked slowly. They took a step forward, not back. 

People, in general, have adhered to guidelines and standard operating procedures issued by the government, that has helped in a slow but decent recovery.

What are your expansion plans? How will the offering help you?

Our plan is to open 700 restaurants by December 2026. Right now, we have 268 restaurants in India. Of this, 259 are owned by us and nine are sub-franchised. Close to 55 per cent of our restaurants are in malls; the balance 45 per cent are a mix of stand-alone stores, restaurants on highways, metro stations, and freeways etc. 

Some of the IPO proceeds will go towards helping us set up new stores, besides paying off a term loan. Future growth, in our view, will be skewed towards freeway and highway locations, metros, high-streets, rest-stops etc.

While there will be 10-15 mall locations that we will target, the potential for growth exists outside malls. Every city today has a metro development programme, and there is a lot of retail and real estate potential around these locations.

Will you lock properties now, given that realty prices have softened in the last few months?

There is going to be consolidation in the real estate market. Rentals will soften, which everyone appreciates. That is, however, not going to be for the long haul. It is a window that will open and shut. Companies that are well-capitalised will seize the opportunity and move forward.

What is your approach towards digital and delivery,  which are two important pillars in the post-pandemic world? 

The initial way we approached delivery was through aggregators. We were the first company in the western quick-service restaurant (QSR) space in the country to tie up with Swiggy and Zomato. Subsequently, we built our own app, which has a loyalty programme, customer relationship management, and analytics, all loaded on to it. The next six months will be spent on promoting the app. 

The ambition is to continue working with aggregators and building our own digital and delivery channel. We see it as a strong business in the long run.

The burger market is unique in India because it is dominated by one brand. How do you see the space evolving?

The Burger King brand is positioned around youngsters — those between 15 and 35 years. The largest such population is in India. Coupled with this are dual-income families that are a reality in India, today. This has a twin effect. 

While it puts more disposable income in the hands of people, it also constricts their time. That is where food service operators like us step in, fulfilling their need for quality food quickly. People will increasingly seek more sanitary and hygienic environments when consuming food thanks to the pandemic. Organised players like us will gain.