Business

Friday May 1, 2009

KFCH gets franchise rights in India


KUALA LUMPUR: KFC Holdings (M) Bhd (KFCH) plans to open 10 KFC restaurants in Mumbai and two in Pune by end-2010 as part of its foray into the Indian market.

“KFCH has been given the rights by Yum! Restaurants (India) Pvt Ltd, the franchisor, to open and operate KFC restaurants in India, particularly in Mumbai and Pune as a start,” chairman Tan Sri Muhammad Ali Hashim said after the company AGM yesterday.

Mumbai, the economic hub of India, has 20.9 million population while Pune, an educational centre, has 5.7 million. “With the combined population exceeding Malaysia’s, we would have some work before moving to other cities (in India),” Ali added.

Currently, there are two KFC restaurants in Pune and four in Mumbai, of which two are owned and operated by Yum! and the remaining two run by local franchisees.

Tan Sri Muhammad Ali Hashim ... There are only 45 KFC restaurants in India compared with 444 in Malaysia

“There are only 45 KFC restaurants in India compared with 444 in Malaysia. Although Yum! has its own operations there, the number is still small, hence there are opportunities for others to come in,” Ali said, adding that the investment would cost almost RM20mil and be funded internally.

KFCH does not expect India to be a significant revenue contributor in the next two to three years until it has set up at least 10 to 12 outlets.

Meanwhile, Ali said profit margins were likely to improve this year given that prices of corn, soybean and crude oil were off their peak levels due to the present weak economic conditions. Last year’s gross profit margins fell slightly to 51% from 55% previously.

KFCH is anticipated to release its first-quarter results next month. “We were challenged in February, but we’re confident of maintaining last year’s first-quarter performance,” Ali added.

The company, which opened 37 new outlets in Malaysia last year, intends to launch 40 more new restaurants in 2009.

It also operates KFC restaurants in Singapore and Brunei.

Its parent, QSR Brands Bhd, on the other hand, is the franchisee and operator of Pizza Hut in Malaysia and Singapore. It also operates four KFC outlets in Cambodia.


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