Mukesh Ambani-led Reliance Industries Limited(RIL) is on an acquisition spree to establish its monopoly in the Indian market. After buying different startups in various sectors, including grocery, ed-tech, music, e-pharmacy, funds, vogue, and furnishings, RIL plans to enter in Quick Service Restaurant(QSR) business. Reliance Retail is in the last stage of discussions to acquire QSR chain Subway India.
Reliance to Acquire Subway India
To expand its offerings further, Mukesh Ambani has targeted the QSR sector. As per internal resources, Reliance Retail’s discussion is on with Subway Inc, the world’s largest single-brand restaurant chain, to acquire its Indian operations.
An anonymous person, familiar with the current deal’s discussion, said that Reliance may pay $200-250 million to close the current acquisition deal. The Connecticut, US-headquartered sandwich maker does enterprise in India using several regional grasp franchisees.
Globally, Subway Inc is restructuring its processes under the leadership of John Chidsey. Maneuvering headquarters, slash prices, and international headcount amid plummeting gross sales are some of the targeted areas where Subway Inc is planning to bring big changes. warring franchisees and rising hypothesis of a worldwide takeover.
When Economic Times contacted Subway management related to current acquisition news, the food restaurant did not comment anything on it. Reliance also did not reply to the e-mail sent related to current leaked information.
If the current talks go through, Reliance Retail, a $100 billion firm, will be having control of around 600+ Subway shops in India. Reliance Retail may diversify Subway offering further to acquire more customers.
Subway Inc and QSR Sector in India
QSR market competition will further intensify in India after the entry of mighty Reliance. After the current deal, the Indian business giants will directly compete with international manufacturers like Domino’s Pizza, Burger King, Pizza Hut, Starbucks, and their native companions such because the Tata Group and the JubilantGroup.
Currently, Subway Inc has Delhi-based Chetan Arora, Sachin Arora, Gulprit Gulri, Manpreet Gulri, Rishi Bajoria, Rahul Bhalla, and others as its main growth brokers of Subway in India. The global QSR sector giant appoints development agents for franchise shops to work closely with franchise operation holders to strengthen the business.
Instead of working with many growth brokers, Subway is looking for a single dominant native participant as in opposition to the present mannequin of regional grasp franchisees and their particular person networks.
The current deal with Reliance Retail may stop that search of Subway Inc to collaborate with a single partner for expanding Subway operations in India.
Doctor’s Associates is the owner of Subway. The firm doesn’t own any Subway shop in India. Instead, it collects 8% of income from every Indian franchise for providing different types of services including marketing and branding.
In India, Subway has the third-largest share with 6% of the Rs 18,800 crore QSR market. Domino’s is the leader of the Indian QSR market with a 21% share, while McDonald’s has occupied an 11% share of the Indian QSR market.