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Burger King Worldwide has formed a joint venture with private equity (PE) major Everstone Capital to develop the Burger King brand’s presence in India. The deal includes a long-term master franchise and development agreement, which includes sub-franchise rights for all of India.
Over the next few months, Everstone will work with Burger King's Asia arm — BK AsiaPac Pte Ltd — to set up the supply chain in India and execute a rollout plan to establish Burger King restaurants across the country, the company said in a statement.
“After a very thorough process, we chose Everstone as our partner based on its history, business acumen and command of the massive and complex India market,” says Elias Diaz Sese, president, BK AsiaPac Pte Ltd.
Sameer Sain, co-founder and managing partner, Everstone Group, said: “Everstone will bring its vast consumer insights, extensive retail real estate expertise, experience of food and beverage operations as well as requisite capital to bear to build the Burger King brand into India’s leading quick service restaurant (QSR).”
Everstone, with $2 billion under management, has investments in food and beverages companies such as Capital Foods, Sula Wines, Blue Foods and F&B Asia Pte Ltd.
The QSR market in India will see a 21 per cent annual growth by 2020 at $4.2 billion (Rs 25,843 crore) from the current market size of $1.1 billion (Rs 6,890 crore). Other sectors such as casual dine restaurants, fine dine restaurants and frozen items will grow at a compounded annual growth rate of 15-18 per cent, said a report from Technopak Advisors.
Dual role
This deal effectively means that Everstone will perform the role both as a joint venture partner and a master franchisee for Burger King in India. The partners did not indicate how much they were investing and the stakes held by the two. However, sources say Burger King will be the minority partner in the venture, with the bulk held by Everstone.
The entry of Burger King is expected to spice up the fast-food market in India, where brands such as McDonald's, Domino's and Dunkin’ Donuts have largely called the shots in the past few years.
Specifically, McDonald's free run in the burger space comes to an end with the entry of Burger King, considered premium in its offering and price points in comparison to McDonald's.
While both Burger King and Everstone did not specify when their restaurants would come on stream, persons in the know say it could happen in the next financial year.
