Burger King Franchise: Any future investment scopes in India?

Burger King, or BK, is the second largest fast food hamburger chain in the world. Worldwide there are about 12,400 restaurants of Burger King in 79 Countries, catering to about 11 million customers everyday. Like McDonalds it is also a US based company associated to a wide chain of franchise entrepreneurs in different Countries.

In India there has been few attempts by Burger King to enter the race; as India has a vast market and many US brand QSRs are doing great business. McDonalds, the largest fast food chain of the world, initiated the trend which was later followed by several multinational brands like KFC, Dominos, Pizza Hut, Taco Bell etc and all doing exceptionally well spreading the American flavor in India. Earlier the two attempts to enter India was through DLG and Kishore Biyani’s Future Group. There were discussions with DLG in 2007 but nothing materialized and India is still devoid of having taste of second largest fast food franchise restaurant Burger King.

Is starting Burger King restaurant a good business in India

As we have witnessed the growth of Mcdonalds in India along with other brands like Subway, Dominos, KFC etc, there is no second thought that Burger King will establish in no time as the reputation of the brand is at par with Mcdonalds. Burger King was founded in 1954 and has been ruling the American and European market in last 59 years and gradually entered outside Europe. In 2010 Burger King was purchased by 3G Capital and multi-million firm and holds 71% stake. Seeing the record of FY 2012 the Company asset is 564 billion dollars and Burger King made 117.7 million US dollars. With such a renowned brand and a widely open market starting Burger King franchise in India is thus one of the best high capital business in India.

Burger King franchise investments, royalty fees and expected profit

Burger King offer three kind of franchises. First for Institutional locations like Government offices, corporate campuses, Airport, train or bus stations, medical centers etc. Second is traditional Burger King restaurant facility at places like shopping mall, markets etc and third one non traditional Burger King restaurant facility at places like food service, gas stations, convenience stores etc. Total investment for starting Burger King franchise is approx 1.4 million US dollars to 2.5 million US dollar which include franchise fee of 50,000 USD, other major costs are for real property or occupational charges of 3,00,000 to 750,000 USD, Construction 550,000 to 900,000 USD, equipments 192,000 to 300,000 USD. Other cost are for insurance, decor package, inventories etc. It is obvious that Burger King franchise is high capital business. however these data is for US franchise and same may not be applicable for other Countries including India.

Royalty fee for Burger King franchise is 4.5% on gross sale. As far as profit is concerned the FY 2102 report reveals the picture as the operating income was 363 USD and net income was 117.7 million USD. Thus the break even may reach in 2 to 3 years.

Starting Burger King franchise in India

As mentioned above, at present Burger King is not offering any further franchise in India, however AmRest Holdings, which has several restaurants across Central and Eastern Europe, and has clear ambitions for India. AmRest Holdings is a Poland based Company and have franchise and joint venture of six well reputed brands of fast foods including La Tagliatella, Burger King, KFC, Pizza Hut, Starbucks and Applebees. While KFC and Pizza Hut already entered India through Yum! Restaurants India and Starbucks with alliance with Tata, now the roads for Burger King is almost clear and soon there may be Burger King Chain of restaurants in India.

The above information has been compiled from the FDD of the Burger King along with online sources.