Management change: Cupola sells KFC
Pakistan to Delicious Holdings
Published: January 30, 2014
The KFC business was going through
some managerial and financial crises and the quality of service was down
lately, say industry sources which might have led to the transfer of KFC
franchises to a new party. PHOTO: FILE
KARACHI:
Dubai-based Cupola Group – that held
the master franchise of Kentucky Fried Chicken (KFC) Pakistan for over a decade
– has sold its flagship KFC business to Delicious Holdings of United Arab
Emirates, The Express Tribune has learned.
For confirmation, the headquarters
of Yum! Brands Inc. – the Louisville, Kentucky-based parent company of KFC,
Pizza Hut and Taco Bell – was contacted but they did not respond to queries,
which were acknowledged by its media team.
Cupola Group, in response, said that
its shareholders had set up a food retail holding company out of Dubai to
expand into food franchise — both inside and outside Pakistan. “The KFC
business in Pakistan will be a part of this entity,” stated the Cupola Group.
While the parties involved are
tight-lipped over details about the agreement, two independent sources have put
the transaction value at a minimum of $20 million.
Cupola confirmed the development
with sources adding that its senior management has been changed already. Nigel
Belton has replaced Rafiq Rangoonwala as the Chief Executive Officer (CEO) of
KFC business, announced Gray Mackenzie Restaurant Internationals, an investor
in Cupola Group.
Based in UAE, Belton is the Chief
Development Officer at Yum! Restaurants International, the largest division of
Yam! Brands Inc. He has 17 years of experience in food and retail businesses in
different parts of the world and possesses a good understanding of Pakistani
market.
Irfan Mustafa, a partner at
Delicious Holdings, and Cupola Group are said to be finalising the formalities as
the agreement has already been signed, our sources say. Mustafa is an IBA
alumnus who previously served as Managing Director (KFC and Pizza Hut) of the
Middle East, North Africa, Pakistan and Turkey business for Yum Restaurants
International, the world’s largest restaurant business.
The American fast food restaurant
chain had entered Pakistani market in 1997 after Abraaj Group opened the
country’s first KFC franchise in Gulshan-e-Iqbal, Karachi. In 2001, Cupola
bought the master franchise rights to operate KFC restaurants in Pakistan.
The business grew significantly over
time to a network of 60 KFC restaurants, covering 20 cities across Pakistan and
contributing more than Rs10 million a month in direct taxes to the exchequer –
each new outlet developed by the company costs around Rs40 million, according
to its website.
The recent growth of local fast food
chains coupled with the entry of several international fast food chains have
increased competition. In contrast, the KFC business was going through some managerial
and financial crises and the quality of service was down lately, say industry
sources which might have led to the transfer of KFC franchises to a new party.
The change of management would help the company revive its quality, they say.
Denying market talks about quality
of service issues, Cupola Pakistan’s former CEO Rangoonwala said, “Some people
may have bad experience but that doesn’t mean the overall quality is down.”
When a restaurant serves 40,000 to 50,000 people a day, not everyone is pleased
with the service, he said.
The former head of KFC Pakistan said
the business could still grow. “I think it was time for a change. The people
who have bought it have a lot of experience. This is a good decision.”
Published in The Express Tribune,
January 30th, 2014.
