Jubilant Food's Popeyes flexes growth muscle as Dunkin', Hong's hit pause
'We want to open 30-50 stores every year. We are just constrained by real estate availability,' Sameer Khetarpal, chief executive officer and managing director of Jubilant FoodWorks, said in an interview with Mint on Wednesday. 'It just takes time to get the right real estate. For a new brand like Popeyes, we can't obviously go to a virgin high street or a mall,' he said.
On Wednesday, Jubilant opened four Popeyes outlets across Mumbai.
Globally, the Popeyes brand is part of Canadian fast food restaurant company Restaurant Brands International Inc. In 2021, Jubilant Foodworks entered into an exclusive master franchise and development agreement to develop and operate Popeyes Restaurants in India, among other markets.
Popeyes made its India debut with a restaurant in Bengaluru in January 2022. It now operates over 60 stores in the major cities of the country.
Popeyes is the company's fastest growing brand and the second-largest brand after Domino's. Jubilant FoodWorks operates restaurants in markets such as India, Turkey, Bangladesh, Sri Lanka, Azerbaijan and Georgia.
'In the next to six to nine months, we should get to 100 stores for Popeyes,' Khetarpal said. 'We are seeing good growth, we are seeing our margins improve. The brand is on track to scale,' he added.
The CEO said that for the time being, the company has paused expansion on its other two brands—Dunkin' and Hong's Kitchen.
'We are not expanding (on these two chains), that's what we have said. At the moment, we have 30 stores each. Till the time we fix the customer value proposition, we won't expand. There is a market for both the formats, but I think the question is: where do we play and how and where do we focus. Expansion will only happen in Domino's and Popeyes,' he added.
The company has yet to announce its June quarter earnings. The company's June quarter update released last month said its consolidated revenue from operations was ₹ 2,261.4 crore, up 17% year-on-year (y-o-y) . As of the quarter's end, the group's network had 3,389 stores, with a net addition of 73 during the three months. During the June quarter, Domino's India opened 61 new stores, ending the period with 2,240 stores. Domino's India's like-for-like growth came in at 11.6% for the quarter.
'We had a good quarter,' he said. 'Dine-in as a channel is growing,' the CEO said.
The company has been pushing 20-minute deliveries in select cities as well as free deliveries to drive sales in an environment where consumers are becoming more value-conscious.
'Markets are very competitive—India has changed in the last 30 years. Mumbai, for instance, has the maximum number of organized quick service restaurant (QSR) outlets. Every year, it gets tougher for a new brand to enter. Our playbook is very simple—food, fast delivery (we do our own delivery, like Popeyes), the app, and then the team,' he said.
The brand sells vegetarian and non-vegetarian burgers starting as low as ₹ 89 apiece. Domino's sells pizza priced as low as ₹ 49, a price point that has remained unchanged for three years now.
'For Popeyes, we are seeing good traction on dine-in as well. Dine-in is far bigger than delivery (for the brand). While, for Domino's, delivery is more dominant,' he said.
Capital expenditure in the fried chicken brand is very similar to industry standards. 'While we have not disclosed it—it is higher than Domino's. We have very little debt on our books. So, we are internally funding the expansion. A lot of our capex in factories, which we want to do in Mumbai and Bangalore, that is done with. In fact, the company was free cash flow-positive last year,' he said.
The promoters of HT Media Ltd, which publishes Mint, and Jubilant Foodworks are closely related. There are, however, no promoter cross-holdings.
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