Reliance Industries Talking With Subway Inc For Indian Franchise – Mukesh Ambani to compete directly with Tata Group to buy Subway’s franchise
If this deal is finalized between the two companies, then Reliance Industries will compete directly with the already existing Tata Group’s Starbucks as well as big players like Domino’s Pizza, Burger King in this segment.
New Delhi. Mukesh Ambani-led Reliance Industries may soon enter the restaurant service business. Currently, the company is preparing to buy an Indian franchise from Subway Inc., the world’s largest restaurant chain company. According to media reports, this deal is likely to be completed in 1500 to 1900 crores. If this deal is finalized between the two companies, then Reliance Industries will compete directly with the already existing Tata Group’s Starbucks as well as big players like Domino’s Pizza, Burger King in this segment.
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What is Subway Inc.
America’s largest single brand restaurant chain company Subway Inc works on the franchise model. Under this, the franchise of the restaurant is given. The company takes its share in the profits from the franchise. The company started its first operation in India in the year 2001. At present, the company holds around 6 per cent share in the Indian market. At present, an Indian company, Light Bite Foods, is managing the business of Subway. This company takes about eight percent profit on each franchisee.
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Domino’s and McDonald’s are the biggest players in India
At present, Domino’s is the largest player in the sector in India with a share of 21 per cent, while McDonald’s is at number two with a share of 11 per cent. If this deal is done with Reliance, then the retail unit of Reliance Industries will get around 600 Subway stores across India. In such a situation, both these companies can get a tough competition and a very similar environment can be seen as was seen in the telecom sector after the announcement of Jio launch.
Reliance will expand business through retail
Reliance Group is doing very good business in the retail sector. The group has built a good reputation in consumer electronics, grocery business and lifestyle. With the acquisition of Subway’s franchise, Reliance Group will also become a leader in the restaurant business.
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