IHC acquires Pizza Hut franchise in central India

India Hospitality Corp, which has made significant investments in hospitality and air catering businesses in India, has acquired the franchise for Pizza Hut brand for central India from its current owner for an undisclosed amount.

The transaction, which is yet to get approval from Pizza Hut’s parent company Yum Brands, could translate into a significant slice of business for IHC, since central India is under serviced and the existing franchisee (Entertainment World Developers or EWDPL) managed to open only an outlet each in Bhopal and Indore till now.

In contrast, the franchisee for Pizza Hut in north and east India — Ravi Jaipuria — has already managed to open close to 60 outlets and is expanding further.

IHC has significant investments in the hospitality business in India, having sunk in close to Rs 800 crore between 2007 and now by acquiring many significant restaurant and food brands.

Through one of its shareholders, Navis Partners, India Hospitality Corp is also indirectly invested in fast food chain Nirula’s.

Ravi Deol, managing director & CEO of IHC, did not disclose the investment needed to acquire the Pizza Hut franchise for central India.

On Nirula’s, he clarified: “IHC holds the right of first refusal (in case Navis were to exit) but we have not taken a call on this yet….we are yet to determine if value is being created for Nirula’s as a brand”.

IHC continues to hold talks with some of the most visible global food and hospitality brands that are eyeing entry into the Indian market.

Though Deol did not confirm this, IHC has also been in talks with Starbucks for the world’s largest coffee chain brand to make another attempt at coming into India.
Starbucks’ application was rejected earlier after the Government objected to the proposed shareholding pattern under which it wanted to set shop here, citing a complete ban on FDI in front end retailing.

Burger King is another global food brand which IHC may be talking to for bagging franchise rights.

IHC president & COO Sandeep Vyas Tuesday announced a partnership with EWPL to lease and manage the latter’s hotels and F&B outlets across various malls in Tier I and Tier II  cities across the country.

In the first phase, IHC will invest Rs 100 crore for this purpose. This deal has been done via IHC subsidiary Gordon House Estates (GHEPL) and also involves EWDPL acquiring a 15% stake in GHEPL. IHC’s multi-brand food business includes ‘Not Just Jazz By The Bay’ and ‘Dosa Diner’ brands; it also owns the country’s largest airline catering business called Skygourmet.