McDonald’s franchisee to invest Rs.500 crore

Monday, February 21, 2011

NEW DELHI - Hardcastle Restaurants Private Ltd (HRPL), the sole franchise of fast food major McDonald’s in south and western India, Monday said it will invest Rs.500 crore over the next three years to expand its footprint in the country.

It also plans to open another 30 outlets in 2011.

“We will be investing Rs.500 crore and doubling our presence over the next three years in India. We now join other McDonald’s businesses such as Latin America where the development licensee operates over 1,700 restaurants with sales of over $3 billion,” said Amit Jatia, vice chairman of McDonald’s (south and west).

“In 2011, HRPL plans to open another 30 McDonalds stores in south and west. This will be the highest opening in the last 15 years,” added a company statement.

The McDonald’s southern and western regions operated under a joint venture with the B.L. Jatia family, Hardcastle Restaurants. The American food major, however, recently sold its stake in the franchisee to the Indian partner.

The Indian partner will now own the entire business, including the real estate but will have to use its own resources to build capacity.

McDonald’s will continue to lend its name to the fast food chain for a royalty and help the Indian company with training and development programmes.

“McDonalds decision to convert the joint venture to a developmental license in south and west India is based on what we consider to be the best franchising method to capture the opportunity that is present today and the enormous growth opportunity that we see as Indias economy continues to grow rapidly,” said Peter Rodwell, division president greater asia and middle east division.

McDonalds India opened 33 new restaurants in 2010 of which two-thirds were in south and western India through HRPL.

HRPL is a debt-free company and will fund the entire investment through internal accruals.

McDonald’s currently has over 32,500 restaurants in 117 countries out of which over 26,300 are operated by varying franchise models — these include 50 countries where development licencees operate.

Filed under: Economy

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