Florida-based Fiesta Restaurant Group, Inc.’s (FRGI - Snapshot Report) subsidiary Pollo Tropical, which mainly serves Caribbean foods, has finally unveiled its first franchised outlet in Delhi, the capital of India. The latest opening came in the wake of the signing of a development agreement with franchisee, Paramount Cuisines Pvt. Ltd, a subsidiary of the Paramount Group in Aug 2012.
The restaurant is strategically positioned in the popular shopping mall, DLF Place, Saket. We believe that Delhi is a strategic fit for entering the country as it is home to the country’s many government organizations, IT firms, well-known universities and research institutes. With more than 50 shopping malls already in action and dozens under construction, Delhi remains one of the vital locations in India.
Delhi-based Paramount Cuisines will unveil nine more Pollo Tropical outlets in India by 2016. The restaurants will be located in Northern India, comprising several important locations like National Capital Region, Chandigarh, Punjab and Haryana.
Both Pollo Tropical and Paramount believe that its chicken options will appeal to Indian taste buds. Additionally, the restaurateur’s already-strong vegetarian offerings can successfully cater to the huge vegetarian population of India.
According to a report by the U.S. Commercial Service, the middle-income population in India is burgeoning and will grow tenfold by 2025. The growth in the income of the larger populace also makes India a lucrative investment proposition. Furthermore, the report reveals that Delhi is expected to be one of the world’s largest metropolises by 2025 following the rapid urbanization.
Hence, these openings reflect the Zacks Rank #2 (Buy) company’s intent to make India one of the prime markets for international expansion. The strategy is likely to be successful because of the growing economy and under-penetration of quick-service restaurants as compared with saturated North American countries.
However, following the growing demand for American dining brands in India, other restaurateurs like Yum! Brands Inc. (YUM - Analyst Report), Domino's Pizza, Inc. (DPZ - Analyst Report) and McDonald’s Inc. (MCD - Analyst Report) are also making their presence felt in the country.