Eli Davidai, the businessman who brought the Pepsi brand in Romania in the early nineties bets on the growth potential of the fast-food market, estimated at 2 billion euros per year, pitting Burger King against McDonald's and KFC.
After having sold the Pepsi distribution network for approximately 150 million euros to Pepsi Americas, Davidai last year signed a contract with the world's second-largest fast-food restaurant chain, which enables him to open 10 Burger King restaurants by the end of next year, investing about 2.5 million euros.
The restaurants will be operated by Atlantic Restaurant Sistem held by Eli Davidai and his partner Marius Nasta.
"The average investment in a restaurant stands at 250,000 euros, but it is very much up to the area where we open each restaurant, because we have street and shopping centre locations planned. We will open three restaurants in Bucharest by the end of the year and six more in 2009, though this time development will include other parts of the country," stated Marius Nasta, chairman of Atlantic Restaurants Sistem.
The first restaurant, which numbers 40 employees, was opened at the launch of the Baneasa Shopping City, and is located between restaurants of its rivals, McDonald's and KFC, which own 55 and 26 restaurants in Romania.
"We hope we will catch up with them soon in terms of profitability, rather than in terms of number of restaurants and this will happen in a few years, especially if the economy continues to grow, while the Romanians' appetite will become more and more complex and sophisticated," Nasta says. Estimates about the number of clients in the first days since the opening of the first Burger King in Romania were exceeded.
"We've had hundreds of clients every day, and on Sunday we even had 70-80 people waiting in line at the cash register," explains Brian Johnston senior director of Burger King EMEA&APAC. The Burger King brand is present in Europe in 2,327 restaurants, 2,042 of which are franchised.
In the second quarter of the fiscal year 2008, the company posted approximately 125 million euros in revenues for the Europe, Middle East and Africa region, an increase of 16% on the corresponding period of fiscal 2007.
"As for our decision to enter Romania, it came after we had surveyed the market and consumer behaviour on the fast-food segment. It became the 30th country to join the chain over the last twelve months and the development process continues," Johnston announced.
The fast-food restaurant market in Romania, which the biggest restaurant chain, McDonald's puts at 2 billion euros is dominated by Americans. McDonald's business in 2007 stood at more than 90 million euros, while KFC's at almost 40 million euros, yet pizza and shawarma places whose number has been on the rise over the last few years account for a significant share, too.
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