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Mad Over Donuts to expand operations in India

Livemint:  November 30, 2016

New Delhi: Singapore-based Mad Over Donuts (MoD), which has been operating only in India for the last eight years, has finally decided to open shops in two more countries in the next fiscal year. It is exploring opportunities in the Middle East, Singapore and Thailand, said Tarak Bhattacharya, chief operating officer, MoD.

The company is currently finalizing local partners and store locations in these countries.

These are the countries MoD founder Lokesh Bharwani had looked at before deciding on India where it launched operations eight years ago.

“Restricting business to just Indian market was a conscious decision. It took time to build a brand from the scratch. Most likely, we’ll start with a Middle eastern country and one of the South Asian countries by third quarter of next fiscal year,” Bhattacharya said.

In India, MoD operates 56 outlets and will add nine new stores by March 2017. “This year, we have added 10 new outlets and we are also looking at entering new cities in India next year, after a gap of about three years. We are considering Hyderabad and Chennai,” said the COO.

MoD currently operates in Mumbai, Pune, Delhi and Bangalore.

In the past couple of years, MoD has restructured its outlets by reducing size, including sitting arrangements at smaller outlets and by introducing fresh limited edition products every six weeks to ensure growth at store level. During the past two quarters, MoD’s same store growth (the ones operational for more than a year) increased at more than 10%.

Its rival Dunkin’ Donuts, operated by Jubilant FoodWorks in India, has 73 outlets across 23 cities. The company has shut down five Dunkin’ Donuts outlets during the July-September 2016 quarter, according to the company’s quarterly results’ statement.

Bhattacharya said MoD is working on developing sugar-free doughnuts to cater to health-conscious consumers. “We have been working on perfecting the products for the past few months. We’ll launch as soon we are ready,” he added.

The home delivery service accounts for about 11% of MoD’s total orders and Bhattacharya said delivery will become as much as 20% over the next few quarters.

Quick service restaurants have started witnessing growth earlier this year after quite a few quarters of consecutive fall in same store growth. Yum Brands, owner of KFC, Pizza Hut and Taco Bell, reported same-store sales growth at 13% at KFC outlets in India and 6% at Pizza Hut India during the July-September quarter after decline for previous 11 consecutive quarters. Jubilant FoodWorks reported 4.2% growth in same-store sales in July-September quarter while the same was a 3.2% decline the previous quarter.

(The promoters of HT Media Ltd, which publishes Mint, and Jubilant FoodWorks are closely related. There are, however, no promoter cross-holdings.)

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.