Thai pizza chain eyes foreign shores for expansion

March 19, 2002

Minor Food Group Plc, a former Pizza Hut franchisee of 105 stores, not only wants to rule the Thai pizza market with its brand The Pizza Company, it wants to expand internationally.

The chain came into being last March when Minor parted ways with Pizza Hut over a long-running franchise dispute. All its former Pizza Hut stores have since been converted to The Pizza Company brand.

Minor announced Feb. 8 that it is courting franchisees to develop both local and international markets.
Bill Heinecke, chairman of Minor, said his company will not only select franchisees carefully, it won't hesitate to close underperforming units. Heinecke told the Bangkok Post that, "(I)f they are not showing signs of profits within the first year, we'll have to shut them down.'

Minor expected The Pizza Company to open 30 new outlets in 2002, both at home and overseas.

Depending on whether the operation is a kiosk or a dine-in site, opening a Pizza Company franchise will cost 5 to 15 million baht ($100,000 to $300,000 U.S.)

Since switching to The Pizza Company last year, Minor claims to have taken a 70 percent share of the Thai pizza market, estimated at 1.8 billion baht ($36 million U.S.) per year. According to Heinecke, the Thai pizza market grew 30 percent in 2001, and he believes it will grow another 15 percent this year.

While last year's rebranding freed them from Pizza Hut, the effort cost Minor 300 million baht ($12 million U.S.) And despite a strong fourth quarter, The Pizza still posted a posted an operating loss of 20 million baht ($400,000 U.S.) last year.

The Minor Group overall grew 5 percent in 2001, and culled revenues of about estimated 3.5 billion baht ($70 million U.S.) in revenue. In 2002, it expects that to grow to 4 billion baht ($80 million). The group has 350 outlets of various restaurant brands.

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