The seven restaurants – run by five companies, because the franchisee in Brasov has three restaurants – ended last year with RON51.2 million revenue, up 6.4% on 2012.
McDonald’s Romania posted RON415 million revenue in 2013. The growth stood at less than 4%, lower than the franchised restaurants’. McDonald’s Romania’s 2013 revenue includes the sales of its 60 restaurants, of the McCafe coffee shops and the franchising fees paid by the seven franchised restaurants.
Although it has a direct presence in Romania, McDonald’s has also granted the franchise to local experienced entrepreneurs.
McDonald’s officials said a few months ago that the company had not granted any new franchise for about four years. They said that in the future, when Romania’s development trend becomes predictable, the division might become a strategic one.
Market sources, however, say McDonald’s froze the process because the group has been planning to transfer the entire business to a franchisee for a number of years now.
Such a deal could translate into several tens of millions of euros collected by McDonald’s. Besides the money from the transfer of the business, McDonald’s will also get a percentage of the annual revenue, which currently stands at almost EUR100 million, the sources added.
Costs for a franchised McDonald’s restaurant include an upfront payment, followed by monthly payments in form of a percentage of the net sales of the restaurant, the McDonald’s officials have previously said without revealing any figures. Market sources close to the company say the percentage of sales starts at 10% and may reach more than 20%.
The sales of the best McDonald’s franchised restaurant amount to almost RON10 million, while its profit to RON650,000, according to the Finance Ministry. Its operator is Bacau-based Petre Restaurante.
The oldest franchise contract was signed with a Brasov businessman a decade ago. Adrian Danes (50) operates three franchised McDonald’s restaurants in Brasov and saw a 6% rise in revenue to RON19.2 million last year, which puts him among the top 20 restaurant operators in Romania, ZF has found.
The leading restaurant operator is McDonald’s Romania, followed by KFC and Pizza Hut, which account more than 10% of the market. McDonald’s, which arrived in this country in 1995, is the only restaurant chain with a direct presence, while rivals KFC, Pizza Hut and Subway operate via franchisees.
The business model McDonald’s might apply in Romania, that is direct presence followed by sale of operations to a franchisee has already been implemented in several Eastern European markets, such as the Republic of Moldova, Bulgaria, Georgia and Azerbaijan. These are small markets of less than 150 restaurants.
(English version by Loredana Fratila-Cristescu)