Reliance Retail in talks to buy Subway India for $200-250 mn

Mukesh Ambani’s Reliance Retail seems to have set its eyes on the world’s largest single-brand restaurant chain Subway’s India franchise. The retail company is in talks to buy Subway India for $200-250 million or Rs 1,488-1,860 crore. This comes as the restaurant chain is undergoing a restructuring process under Chief Executive John Chidsey and is looking to cut costs and global headcount as sales take a hit.

Reliance Retail has forayed into a range of segments from grocery, e-pharmacy, payments to fashion and furniture. Quick service restaurants then seem to be right up its alley.

If the talks are successful then RIL will gain the network of 600-something Subway stores across the country, said a report in The Economic Times. RIL-Subway would intensify the competition that has players like Domino’s Pizza, Pizza Hut, Burger King, Starbucks etc.

The global chain has been looking to streamline their India business with a local partner as against the current model of regional master franchisees and individual networks. In 2017 too, several Indian franchisees of Subway had tried to create a platform and were in talks with investors for a buy-in.

Subway appoints master franchise of ‘development agents’ who directly run clusters of stores or sub-franchise stores to smaller partners. Dabur promoter Amit Burman’s food retail company Lite Bite Foods is one such.

Subway is operated by Doctor’s Associates that does not own a single location but collects 8 per cent revenue from every franchise.

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