The fast-food market in India is booming, and people in India are in love with quick-service restaurants (QSRs) likes of Domino’s, Dunkin’ Donuts, Burger King, McDonald’s, and KFC. In fact, the total fast-food market is pegged to be around Rs 162 billion.
But there are some players in QSRs segment that are doing well, while others are struggling to make profits. Jubilant FoodWorks, which operates Domino’s and Dunkin’ Donuts’ in India, is the most attractive franchise among fast-food joints.
According to a recent report by research and investment firm Emkay,
“The company has got stronger unit economics, better profitability and ability to invest for growth than its peers. Cost comparison indicates Jubilant’s margins have scope to expand further.”
Jubilant FoodWorks has reported double-digit growth and a five-year sales CAGR of 15%, which is double the rate of other consumer staple companies. It has also expanded its network faster than peers Westlife Development Limited which operates McDonald’s restaurants in South and West India and Yum Brands which manages KFC, Pizza Hut and Taco Bells.
Apart from the above-mentioned reasons, Jubilant strong presence in tier 1 and tier 2 towns as compared to its peers is another key contributing factor to its success. On the other hand, Westlife Development Limited and Burger King are more concentrated in metros. Moreover, Jubilant FoodWorks also has rights for Domino’s franchise in neighbouring countries such as Nepal, Sri Lanka and Bangladesh, while rivals Burger King and Westlife Development Limited are confined only to India, with Westlife Development Limited operating only the South and West India business of McDonald’s.