Devyani International, the largest franchisee for Pizza Hut and KFC (Kentucky Fried Chicken) in India, has bought 61 more outlets of US-based Yum Brands’ KFC India for an undisclosed amount.
Devyani, promoted by Ravi Jaipuria-backed diversified group RJ Corp., will acquire the outlets across Karnataka, Andhra Pradesh and Telangana, KFC India told The Economic Times. Late last year, Devyani had acquired 13 restaurants in Kerala and Goa.
The move is in step with Yum Brands’ strategy of exiting capital-heavy operations across the globe in a bid to sharpen focus on brand growth and development. “We continue to re-evaluate ownership strategy as part of an annual process and in line with business growth. The strategic intent is to unlock growth for the brand,” KFC India managing director, Samir Menon, told the publication.
Pizza Hut, which is Yum’s other brand in the country, is already fully franchised. Devyani, which is Yum’s oldest franchise partner in the country, has around 500 KFC and Pizza Hut outlets. “KFC is one of the fastest-growing brands in our portfolio. Our partnership with Yum is driven by a commitment to build the brand by expanding geographic presence and driving world-class operations,” Virag Joshi, Devyani’s chief executive, told the newspaper.
RJ Corp. also owns Varun Beverages Ltd, which is one of the largest bottling partners globally of PepsiCo Inc.
With this sale, KFC India’s share of company-owned outlets in India will drop to less than 10%. It currently has around 400 units in the country.
Sapphire Foods India Pvt. Ltd, another franchisee for Yum’s KFC and Pizza Hut outlets in India, recently raised fresh capital from Edelweiss Private Equity and Goldman Sachs.
Sapphire Foods is also backed by a consortium of private equity firms Samara Capital, CX Partners and IDI Emerging Markets.
The company was set up in September 2015 when it had acquired about 250 KFC and Pizza Hut restaurants in India and Sri Lanka from multiple franchisees and Yum.