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Food service chain GFA mulls PE route to raise funds

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Pizza Corner-owners Global Franchise Architects (GFA) is considering raising funds through private equity investment or through venture capitals as it looks to a 30-40 per cent compounded growth in the next three-four years.

The food service chain, which also owns food service brands such as Pizza Corner, The Donut Baker, Coffee World and The Cream and Fudge Factory, is considering raising funds by the end of the year, said Joseph Cherian, Chief Executive Officer, GFA India, and MD, Global Services.

He did not say how much funds the company plans to raise or how much of a stake it intends to offload.

Pizza market
The organised pizza market comprising three-four large MNC brands is estimated at Rs 700 crore and growing at the rate of 30 per cent a year, according to the Food Franchising Report 2009. GFA’s Pizza Corner is estimated to have 10-12 per cent of the market share.

GFA, currently, has 62 outlets in India: 44 Pizza Corner stores, six Coffee World outlets, eight The Donut Baker outlets and four The Cream and Fudge Factory outlets. The plan is to grow this number to 100 by March 2010 through both company-owned and franchised stores.

Currently, 60 per cent of the 62 outlets are company-owned and the rest are franchised. About 30 per cent of the existing outlets are located in malls, Cherian said.

Combo offer model
In a strategic move, the company is now offering a combination of two or three of its brands in a single outlet. “This will be more viable as we will have a larger target audience,” points out Cherian.

In fact, a few outlets that have followed this combo offer model are now seeing a 30 per cent increase in revenues, according to him.

The company recently partnered with a master franchisee for eastern India which will take its complete portfolio to the region through 35 outlets.

GFA intends to have a presence in the North and the West and is looking for partners in these regions.

GFA is a privately-held company based in Geneva, Switzerland, with corporate offices in Thailand, India, the US and the UAE.

Globally, Thailand and India contribute about 75 per cent the company’s revenues.

Source: Business Line

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