BANGALORE: Geneva-based Global Franchise Architects which runs food brands like Pizza Corner and Donut Bakers is investing Rs 40 crore to expand operations at its Indian subsidiary.
The funding will be primarily used for the growth of Pizza Corner according to Joseph Cherian, CEO of GFA Global. "The organised food sector in India is growing rapidly and the pizza category is growing at 25 %" said Cherian.
The company keen to capture a slice of the growing action in India's pizza industry which is valued at Rs 1200 crore, had been scouting for risk capital for over a year now.
However a lack of consensus on valuation has stymied plans to raise private equity funding. "We found that since our brands are in different stages of growth we were not getting the right valuations," said Cherian.
GFA is also changing its franchise strategy for its flagship Pizza Corner brand. So far, almost 75% of the 60 Pizza Corner stores in India are owned by franchisees. However, as the company expands into new markets it will have a majority of corporate- owned stores in the next few years.
The brand plans to launch 25 stores in the next nine months, primarily in South India.. "Once we have a sustainable model in one region, it is easier to expand, because entry cost is always large in the back end," said Cherian. The company has posted an increase in India revenues by 25% annually for the past couple of years.