The KFC business was going through some managerial and financial crises and the quality of service was down lately, say industry sources which might have led to the transfer of KFC franchises to a new party. PHOTO: FILE
Dubai-based Cupola Group – that held the master franchise of Kentucky Fried Chicken (KFC) Pakistan for over a decade – has sold its flagship KFC business to Delicious Holdings of United Arab Emirates, The Express Tribune has learned.
For confirmation, the headquarters of Yum! Brands Inc. – the Louisville, Kentucky-based parent company of KFC, Pizza Hut and Taco Bell – was contacted but they did not respond to queries, which were acknowledged by its media team.
Cupola Group, in response, said that its shareholders had set up a food retail holding company out of Dubai to expand into food franchise — both inside and outside Pakistan. “The KFC business in Pakistan will be a part of this entity,” stated the Cupola Group.
While the parties involved are tight-lipped over details about the agreement, two independent sources have put the transaction value at a minimum of $20 million.
Cupola confirmed the development with sources adding that its senior management has been changed already. Nigel Belton has replaced Rafiq Rangoonwala as the Chief Executive Officer (CEO) of KFC business, announced Gray Mackenzie Restaurant Internationals, an investor in Cupola Group.
Based in UAE, Belton is the Chief Development Officer at Yum! Restaurants International, the largest division of Yam! Brands Inc. He has 17 years of experience in food and retail businesses in different parts of the world and possesses a good understanding of Pakistani market.
Irfan Mustafa, a partner at Delicious Holdings, and Cupola Group are said to be finalising the formalities as the agreement has already been signed, our sources say. Mustafa is an IBA alumnus who previously served as Managing Director (KFC and Pizza Hut) of the Middle East, North Africa, Pakistan and Turkey business for Yum Restaurants International, the world’s largest restaurant business.
The American fast food restaurant chain had entered Pakistani market in 1997 after Abraaj Group opened the country’s first KFC franchise in Gulshan-e-Iqbal, Karachi. In 2001, Cupola bought the master franchise rights to operate KFC restaurants in Pakistan.
The business grew significantly over time to a network of 60 KFC restaurants, covering 20 cities across Pakistan and contributing more than Rs10 million a month in direct taxes to the exchequer – each new outlet developed by the company costs around Rs40 million, according to its website.
The recent growth of local fast food chains coupled with the entry of several international fast food chains have increased competition. In contrast, the KFC business was going through some managerial and financial crises and the quality of service was down lately, say industry sources which might have led to the transfer of KFC franchises to a new party. The change of management would help the company revive its quality, they say.
Denying market talks about quality of service issues, Cupola Pakistan’s former CEO Rangoonwala said, “Some people may have bad experience but that doesn’t mean the overall quality is down.” When a restaurant serves 40,000 to 50,000 people a day, not everyone is pleased with the service, he said.
The former head of KFC Pakistan said the business could still grow. “I think it was time for a change. The people who have bought it have a lot of experience. This is a good decision.”
Published in The Express Tribune, January 30th, 2014.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS (18)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Last management were the worst pay masters to their suppliers. You should see the list of bankrupt suppliers, i am glad they are one of them now. !!!!
I am going to KFC almost 3-4 times a week and there service and food quality both went down to extend that last week i had to ask there counter manager at KFC F 10 Markaz are you guys are closing down your outlet after seeing the lousy atmosphere (Washroom was not clean enough, few seating places needed an overhaul, kids play areas was deserted, and top of it for past many weeks there credit card machine is not working) i ordered for fries and chicken mania both served cold and yes were replaced as i called the manager. there prices are unnecessarily high for kidy/chicky meals (as McDonald was still below 200 rupess till dec 2013 now its 220) same goes for regular meals even though Mcdonald prices for regular meals are also not in favour of middle class... the new management should take care of all these things...Pizza Hut is also going through same my recent incident on their flagship outlet at centaurs mall the pitcher of pepsi i have demanded was full of tissue paper particles (which initially i though are insets) later on inquiry i realized that all pitchers and goblets are being dried with tissue paper so Pizza boys are helpless to bring people particle free drink :) and sizes of Pizza also becomes very funny considering the food consumption of Pakistani nation a regular pizza in not able to satisfy two people (despite the fact before placing order i confirmed how much slices will be it and 6 seemed enough) but after it was served had to repeat my order and interesting bill of 2 regular pizza + plus appetizer plater+pitcher was almost Rs.3,000.00 which seems little over priced considering 2 (or 3 less eater) person one time meal. (a Large size pizza which is enough for 3 is easily available at any other restaurant with drink / salad for Rs. 1,000) only
i hope new people will take care of Pakistani taster and affordability...
Finally, someone to take KFC out of its low quality, food poisoning-inducing slumber
Rafiq Rangoonwala Is the responsible for down fall of KFC In pakistan, Kick off Competent Operation team & promoted illiterate team to save money
what follows next is downsizing and price hike, given the competitors who already have high prizes and then only one will have rat free original recipes. oh btw if I am waiting 30 mins over counter I won't care abt anything except for being catered.
Free zingers for everyone (plzzz)... hurray!!!
"When a restaurant serves 40,000 to 50,000 people a day, not everyone is pleased with the service, he said."
What a typical and glaringly obvious reminder of the generic Pakistani business mindset. Making up pathetic excuses for their own slack instead of taking up responsibility and owning up to their mistakes.
Everybody will be pleased IF you would make it a corporate goal to treat each and every customer professionally and actually enforce the policy at your outlets. Chalking it up to law of averages is plain silly and lazy; not to mention a pretty good indicator why a change in who holds the reins was in order at KFC.
If the head honcho accepts that his team is not capable of providing good quality and pleasant sevice to every customer (who, need it be reminded, actually pays good money for your service/products), imagine the morale at the bottom tier of the people who actually serve at the fore in the establishments.
Get your act together, a lot of hardworking people rely on this corporation for their livelihoods. Such an unprofessional attitude on part of the head honcho reflects equally badly on the employees. Any downward descent in service will repel customers, thus affecting the demand, which will inturn marginalize the folks flipping pattys or working up a grease in the back kitchens or toiling at the counter; leading back to hampered service. Break the vicious cycle.
Imran, that's exactly what anyone would've said after reading what the Ex-CEO said! He just doesn't have the balls to realize and accept what they were doing wrong. That's one of the many reasons why each of the several businesses of Cupola Pakistan proved unsuccessful and closed down!
Hopefully the new management will do something to kill the huge RATS running freely in their Islamabad branch before introducing original recipe zinger !!
Please introduce original recipe here in Pakistan. It will change your business
Cupola Pakistan’s former CEO Rangoonwala said, When a restaurant serves 40,000 to 50,000 people a day, not everyone is pleased with the service
In Food Industry, your every customer must be satisfied.. Ex-CEO did not learn the basics..
New management please bring back original recipe. thank you
KFC Pakistan should improve their zinger recipe. Its totally different than the original. No succulent No taste.
Give me a KFC burger over some other ones anyday
KFC had the worst service. I think its too late for them now. Burger King, TKI Friday, Hardees will fill the gap which KFC failed to.
Duddeeee
Nice!
KFC please bring your original recipe chicken to Pakistan. Abroad there's an option to choose between original recipe (which is how KFC is supposed to taste like, with succulent and soft skin coating) and crispy. In Pakistan only crispy chicken is offered, its coating feels like wood shavings. Needless to say, I've stopped going to KFC here.
Remember when the zinger burger used to be heavenly? What happened? Some time between 2002 and 2008, food and service at KFC Pakistan nosedived.