Reliance Retail in talks to buy Subway India for US$ 200-250 million
- IBEF
- August 3, 2021
Reliance Retail, owned by Mr. Mukesh Ambani, appears to be eyeing the India franchise of the world's largest single-brand restaurant chain, Subway. Subway India is being bought by the retail giant for US$ 200-250 million, or (Rs. 1,488-1,860 crore). This comes as the restaurant business, led by Chief Executive Mr. John Chidsey, is undergoing a restructuring process, with the goal of reducing expenses and global personnel as sales decline.
Reliance Retail has ventured into a variety of industries, including food, e-pharmacy, payments, apparel, and furniture. Quick service restaurants, on the other hand, appear to be right in its wheelhouse.
According to a report in The Economic Times, if the talks are successful, RIL will gain a network of 600-plus Subway outlets across the country. RIL-Subway would ratchet up the rivalry, which already includes Domino's Pizza, Pizza Hut, Burger King, and Starbucks, among others.
In contrast to the current arrangement of regional master franchisees and individual networks, the global chain has been aiming to streamline its India business with a local partner. Several Indian Subway franchisees attempted to develop a platform in 2017 and were in talks with investors for a buy-in.
Subway hires master franchisees known as "development agents" to oversee clusters of restaurants or sub-franchise stores for smaller partners. One such company is Lite Bite Foods, which is owned by Dabur marketer Mr. Amit Burman.
Doctor's Associates who operate Subway, does not own a single outlet but receives 8% of all franchise earnings.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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