Pizza Express, the UK based Italian casual dining restaurant chain, recently announced a 50/50 JV in India with Gourmet Investments. This is a very well respected and beloved brand in their local market that ventured abroad with a similar model to their USA casual dining cousins. Just sign up master or territorial franchises with no equity participation. This recent announcement is one more example that putting “skin in the game” is more and more essential to doing business in fast growing emerging markets like China, Russia and India.
The Group MD of one of the largest and most successful F&B businesses in Asia recently told me:
“In essence, I feel in order for any brand to succeed, the brand owner must invest and take a substantial meaningful stake in order to show commitments. Often I feel that franchisor/franchisee business model will not work for serious players in Asia and this is the best time to talk about JV.”
I think that says it all!