Burger King and its coffee and beverage sub-brand BK Cafe together had a national store count of 391 restau- rants as of March.
Everstone, RBA and Gene- ral Atlantic didn’t respond to queries. Advent Interna- tional declined to comment. Both Advent International and General Atlantic are private equity firms focused on buyouts of companies in Asia, Europe and North America.
Everstone Capital holds the stake in RBA through its investment vehicle QSR Asia Pte Ltd. The Singapore- based private equity group had brought Burger King to India in 2014.
The due diligence on the stake sale comes at a time when growth of western- style fast-food has slowed as consumers switch to lower- priced brands, and competi- tion from smaller, regional brands has stepped up.
“Key risks to RBA are slo- wer-than-expected impro- vement in customer foot- falls, delays in store expan sion plans and increased competitive intensity in the north and east markets, ICICI Securities wrote in a post-earnings note on May 18. Burger King has cut store expansion guidance by 4% to 450 stores for FY24 aga- inst 470 stores previously.
Rival Devyani Internatio- nal, which operates KFC and Pizza Hut in India, re- ported a 21% decline in net profit in the quarter ended March, as inflation hurt margins, demand slowed and competition from smal- ler brands offering similar products at lower prices in- creased.
chains have said they will continue to escalate store expansion, led by opportu- nities in small towns, along highways and emerging channels such as convenien- ce stores at petrol stations.
Credit rating agency ICRA said in a report last month that the top five in the do- mestic QSR industry could add close to 2,300 stores bet- ween FY23 and FY25 for an estimated capital expendi- ture of 5,800 crore. The re- port cited Domino’s opera- tor Jubilant FoodWorks. De- vyani International and Sapphire Foods India, Res- taurant Brands Asia and Westlife Foodworld, which operates McDonald’s in the west and south. Sapphire is a franchisee partner of KFC and Pizza Hut.
“The capex spree in the QSR industry is likely to be driven by favourable demog raphics, steady urbanisa- tion, growing per-capita GDP and significant headro- om available in terms of pe- netration, compared to a de- veloped economy like the US,” Suprio Banerjee, vice president and sector head. corporate ratings, ICRA, wrote in the report. The re- port said most of the capex will be funded through in- ternal accruals and cash on the books.