Burger King will soon enter India through a franchising partnership with a company that will be headed by the present CEO of its UK operations and majority-owned by private equity firm Everstone Capital, a rare instance of a PE (Private Equity) fund partnering with a fast-food chain, stated a report by Ratna Bhushan and Rasul Bailay in Economic Times.
In a departure from its usual global practice, the US chain will also hold a minority stake in the Indian franchisee, said a person familiar with the development. The India venture will be spearheaded by Rajeev Varman, Chief Executive, Burger King in the UK.
Varman spent time with Sameer Sain, Founder, Everstone Capital and Partner, Jaspal Sabharwal in India, studying the local market and meeting potential vendors.
Two persons with direct knowledge of the development said Burger King and Everstone are expected to sign the franchising agreement shortly. A Mumbai-based real estate developer will also pick up a minority stake in the franchisee company. “Everstone (and its partners) plans to invest USD 100 million to set up 500 outlets in the country over the next seven to ten years,” one stated a source.
Burger King, which is famous for its signature Whopper sandwich, will be among the last big global food chains to enter India.
Everstone owns a controlling stake in Pan India Food Solutions, which operates a host of restaurants, including Noodle Bar, Copper Chimney, Spaghetti Kitchen and the local franchisee of US-based Coffee Bean & Tea Leaf.
Samir Kuckreja, President, National Restaurant Association of India, said that Everstone’s experience in earlier food ventures would come handy in its new partnership. “Now, they have to hire the right management, position it well, and get the menu right in India to be successful with Burger King,” he added.