The QSR of Asia under Thai Beverage Plc (ThaiBev), one of the operators of KFC in Thailand, is keen to participate in a race to acquire another KFC franchise if Restaurants Development Co, one of the other KFC franchisees in Thailand, agrees to sell its KFC franchise business as reported.
According to a source from the restaurant industry who requested anonymity, leading executives from ThaiBev and QSR of Asia consulted about this acquisition plan prior to the outbreak of Covid-19.
However, the deal is unlikely to be settled anytime soon, as executives of the two companies need time to study its feasibility and related business conditions, said the source.
In the first half of this year, there were 954 KFC restaurants operating in Thailand. QSR of Asia is the largest KFC franchisee in Thailand, operating a total of 409 KFC branches, followed by Central Restaurants Group with 305 restaurants and Restaurants Development with 240 outlets.
Reuters reported on Monday that Restaurants Development is exploring the sale of its KFC franchise business in Thailand, which is valued at around US$300 million.
The Bangkok-based firm, backed by a consortium led by Southeast Asian focused private equity firm AIGF Advisors Pte, is in talks with at least one advisor on the potential sale, according to Reuters, citing the sources, who asked not to be named as they were not authorised to speak to the media.\
People stand outside a KFC restaurant in Lat Phrao area in Bangkok. (Photo: Apichart Jinakul)
Restaurants Development was considering the sale of its KFC business in 2020 but the process was shelved due to the impact of the pandemic, two of the sources said, according to Reuters.
Another source from the local restaurant industry in Thailand, who also requested anonymity, said Restaurants Development is studying a new solution, either by selling its right to other investors or operate some KFC branches in Thailand on its own with new partners.
"No matter whether Restaurants Development will sell its KFC franchise in Thailand or not, it may be not possible for ThaiBev to buy the KFC franchise from Restaurants Development because Yum Restaurants wants to maintain the number of KFC franchisees in Thailand at three, because it is a model that has proven to be very successful in Thailand due to a diversity and competitive advantage and the sharing of knowhow among each of them,'' said the industry source, who is an ex-employee of Yum Restaurants International Thailand, the trademark owner of KFC.
Yum Restaurants has applied this business model across the world. Each country typically has 1-100 franchisees to operate KFC, depending on the size of the country.
There was no response from Central Group to a request for comment.
According to the Business Development Department's data, Restaurants Development was established on June 11, 2015, to operate a restaurant business, with registered capital of 400 million baht. The firm reported a continued net loss over the past six years, with a net loss of 232 million baht in 2021, 280 million baht in 2020, 127 million baht in 2019, 92.9 million baht in 2018, 144 million baht in 2017 and 80.6 million baht in 2016.