Burger King targets 50 outlets by year-end

In what will be one of its fastest rollouts in a new market, Burger King, the world's second-largest burger chain, proposes to touch the 50-outlet mark in India by the end of 2015. The US-based fast-food giant first stepped into India in November last year following a joint venture with private equity fund Everstone.

Since then, it has set up 32 stores in eight cities, with plans to add a few more by the end of this year, Raj Varman, CEO, Burger King India, said.

"Chennai is one city we will go to this year because it allows us greater penetration in the south. We already have stores in Bengaluru and Hyderabad. So, Chennai was a logical extension in that sense. In the north, we will soon launch stores in Amritsar because it completes the cluster for us, there after we can step into cities such as Chandigarh, Jalandhar and Ludhiana," Varman said.

The chain already has stores in Mumbai, Pune and Delhi-NCR and proposes to ramp up operations in these cities. Next year could see the chain consider markets such as Ahmedabad and Kolkata, though Varman declined to comment on the issue. "There is enough potential for us in the existing markets. Right now our attention is focused on these," he said. Unlike rivals such as Domino's Pizza, which has a centralised kitchen or commissary for different regions, which then feeds nearby stores, Burger King prepares its products at its outlets itself.

This, says Varman, allows products to be fresh, ensuring quality and taste. "What we have dispersed across the country are distribution centres that provide the ingredients to various outlets. Our expansion into markets is based on where our distribution centres are located. It is easier that way," he says.

Burger King is also expected to continue launching company-owned-and-operated stores in India as opposed to the industry trend of having franchisee outlets. Varman says the existing joint venture does have the rights to sub-franchise the brand to external players, but that option is not being considered yet. "At this stage, we are keen to continue with the existing model (company-owned-and-operated). It gives us a better handle on operations," Varman says.

The burger chain is estimated to have spent close to around Rs 65 to 70 crore for setting up the 32 stores, with the per-store cost working out to around Rs 1.75 to 2.5 crore. Setting up another 15 to 18 stores by the end of the year will see the firm spend another Rs 40 to 45 crore. Varman says the chain remains committed to the Indian market and will step up its investments in the coming years.

The chain is also expected to amplify its marketing efforts as it acquires scale. This includes possible associations with film and sporting properties to grab eyeballs. It recently tied up with reality show Big Boss on Colors channel to launch limited edition Whopper burgers.

The firm is also expected to tap the online channel aggressively to increase home deliveries. "Currently, the delivery channel is in its infancy. But in the next few years, we hope to take the delivery model to 15 to 20 per cent of total sales," Varman says.