Most stores of the Boston-based chain close after differences with partner Spencer’s Retail
RP-Sanjiv Goenka Group is believed to have closed down almost all the Au Bon Pain Cafés in India spread across Bangalore, Kolkata and the National Capital Region following what is being seen as souring of relationship between Goenka's Spencer's Retail and the Boston-based cafe chain.
Au Bon Pain Café India Ltd, a 93.10% subsidiary of Spencer's Retail, has shut down all the nine cafes and kiosks in Kolkata and 16 in Bangalore as per listing on the popular restaurant-listing website Zomato.
Group head Sanjiv Goenka indicated differences of opinion over management of the cafes between Spencer's and AU Bon Pain authorities leading to the closures.
"It's about our international partner. I can't disclose more as certain negotiations are going on. We have opened a Spencer's there and its now off to a flying start," Goenka said when asked why Au Bon Pain's flagship Kolkata store at Park Street was closed down last month.
Goenka also refused to elaborate on the nature of negotiations with the franchise owner.
The closure of the Au Bon Pain chain appears to be the failure of the two parties to come to an agreement on a strategy to revive the chain even after installing a new operation management and a menu that suits more to the Indian palate.
The Goenkas were dissatisfied with Au Bon Pain's foreign management, particularly their lack of knowledge about and disinterest in Indian food habit and preferences for mostly not-so-popular foreign cuisine, sources said.
Founded in 1978, Au Bon Pain grew into an international chain known for its fresh ingredients and popular items like sandwiches, bread, pastries, salads and soups, and is considered to be one of the top 5 healthiest restaurant chains in America over the past three years. It currently operates in more than 300 locations in the US and across the globe.
In 2008, LNK Partners, a private equity firm focused on the consumer sector, acquired a majority ownership in the company with more than $100 million of equity helping Au Bon Pain expand in select global markets.
In 2009, Au Bon Pain first entered Bangalore, India, on account of Goenka daughter Avarna's initiatives, who, while graduating from Wharton, developed a liking for the 'fast casual restaurant' brand. With a focus on healthy diet, outlets were serving an innovation called "build-it-yourself" range and assortment of breakfast and lunches such as soups, stews and sandwiches.
Of the total equity, 6.9% was taken by Varin Narula, the director and promoter of Au Bon Pain, Thailand.
Despite a difficult presence, the Goenkas hoped for a revival till FY-17 end opening eight new cafés during the year making itself present in three regions through 29 stores. Over FY16 and FY17, the subsidiary suffered losses of Rs 21 crore each.
COLD COFFEE
- The closure may on account of the two parties failing to agree on the strategy to revive the Boston-based chain
- This comes even after the chain installed a new operation management, menu that suits Indian palate
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