Restaurant Brands Asia: Dining in the Fast Lane & Its Growth Prospects

“We would not look at growth as far as Burger King is concerned but we will continue to invest behind Popeye and we intend to get to our 25 stores by March of 2023 as far as Popeye is concerned and then as we get to 700 stores in India and Indonesia between both the brands we should be able to get to 325 stores and that is when we would be coughing the number of thousand stores at the business level over the next three years and these are basically the broad guidelines that we are working towards as a team.”
-Sumit Zaveri, Group CFO & CBO

Stock Data

Ticker	RBA
Industry	Restaurant
Exchange	NSE & BSE

Share Price

Last 1 Month	2.7%
Last 6 Months	-7.6%
Last 12 Months	8.2%

Business Basics

Restaurant Brands Asia Limited (RBA) is a multinational company that holds the exclusive master franchise rights for Burger King and Popeyes. The company specializes in the development, operation, and expansion of these two iconic quick-service restaurant (QSR) brands in the region. As the master franchisee, RBA is responsible for overseeing the growth and management of Burger King and Popeyes restaurants in its designated markets. The company works closely with the parent company, Restaurant Brands International (RBI), to ensure brand consistency, operational excellence, and customer satisfaction.

RBA’s primary focus is on licensing and franchising Burger King and Popeyes to local operators who operate individual restaurants under these brand names. The company provides comprehensive support to its franchisees, including brand marketing, training programs, supply chain management, and ongoing operational guidance. This partnership model allows RBA to rapidly expand its footprint while leveraging the local market expertise and resources of its franchise partners.

Burger King, known for its flame-grilled burgers, and Popeyes, famous for its Louisiana-style fried chicken, have established themselves as beloved QSR brands globally. RBA’s objective is to maintain the brand integrity, quality, and unique flavors of each brand while adapting to the local preferences and tastes of Asian consumers. RBA also focuses on driving business development initiatives to identify new market opportunities, evaluate potential acquisitions or partnerships, and optimize operations. The company aims to enhance the customer experience, increase market share, and drive profitability through continuous improvement and innovation.

Q4 FY23 Financial Performance

Restaurant Brands Asia Limited reported Total Income for Q4 FY23 of ₹518.26 Crore up from ₹409.33 Crore year on year, a growth of 26.6%. Consolidated Net Loss of ₹79.95 Crore, widen from loss of ₹81.53 Crore in the same quarter of the previous year. The Earnings per Share is -₹1.48, from -₹1.53 in the same quarter of the previous year.

Company’s Geographical Business Segments

The company has divided it’s operation into two geographical segments: India & Indonesia. For Indian markets, the company RBA operates and manages the Burger King and BK Cafe brands. As the master franchisee, the company oversees the development, growth, and operations of Burger King and BK Cafe restaurants throughout the country. In Indonesia, RBA is responsible for the Burger King and Popeyes brands. The company holds the exclusive master franchise rights for both brands in the Indonesian market. RBA works closely with its local franchisees to maintain brand standards, ensure high-quality food offerings, and deliver a consistent dining experience to customers.

RBA’s Restaurant Growth

As of March 2023, the company has 391 restaurants of Burger King in India. In FY23, RBA has opened 88 restaurants and closed 12 restaurants that were not profitable or did not have a growth potential. As of now, the company has 15 restaurants under construction and 38 are in the pipeline. BK Café which was started in the beginning of FY 2022, currently has active restaurant count of 275. As per the management, RBA will continue to build BK Cafés as they build new. Regarding the company’s BK app, the management commented, “BK app revenues grew 327% year over year 6.2 million apps installed, 107 growth over the last years installed so some progress on that side as well. We believe that we will continue to spend on the app, and we will continue to build that business over time and continue to work with our aggregate partners as well to continue servicing our consumers both on dine in as well as delivery.”

In the same period, Indonesia has 176 restaurants of Burger King and 10 Popeyes. Moreover, all these 10 stores were opened in 3 months. The company is going to build additional restaurant and move towards the total of 25 to 30 restaurant at the end of this year.

Outlook of India’s QSR Industry

The Quick Service Restaurants (QSR) market in India is projected to grow at a CAGR of over 18% during 2021-2025 due to increasing urbanization, rapid expansion in food delivery services, expanding young & working population, growing number of dual-income families and rising disposable income in the country. Some challenges faced by QSRs in India include rising costs of raw materials, labor wages, and real estate rentals . Setting up restaurants in India can also be a time-consuming and tiresome process since it requires multiple government clearances . Another major challenge faced by quick foodservice providers is the lack of a skilled workforce, primarily in small cities and towns.