Reliance Retail eyes Subway India in $ 250 million deal: report

Mukesh Ambani’s Reliance Retail is reportedly considering the Subway India franchise in a near-final deal estimated at around $ 200-250 million, sources familiar with the development have confirmed. Economic times.

If passed, the move will mark Reliance Group’s entry into the food and beverage industry, particularly quick service restaurants. The conglomerate’s interest in the sector stems from the fact that competitors have either gone public or are in the process of launching IPOs, like Burger King.

Despite two decades in the country, Subway has failed to differentiate itself in the market from fast service franchises like KFC, Dominos and McDonalds. According to media reports, Subway has closed 12% of its outlets in the past five years, the chain’s problems leading up to the Covid-19 pandemic. In 2019, Subway US closed up to 1,000 outlets.

Metro outlets operate in a different way from McDonald’s or Dominos, that is, through individual franchise outlet owners. Other quick service points allow a main franchise to operate multiple outlets across the country. The model apparently did not work for Subway. The lack of a master franchise has led to a lack of operational structure among the operators.

Reliance Retail is aggressively expanding its position through acquisitions and investments, their recent expansions include companies ranging from Just Dial to Zivame. As for the Subway agreement, if it succeeds, it will mark the giant’s entry into an already competitive market. Subway’s future may look different under Reliance.

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