Ziarul Financiar reported last summer that Malta’s Premier Capital group would buy the Romanian operations of McDonald’s. McDonald’s officials did not return ZF’s calls for comment by press time.
ZF first broke the news about the US group looking for a partner for the franchise of the local operations, as Romania is too small a market for a direct presence eighteen months ago. McDonald’s has 67 restaurants in Romania, which generate almost EUR100 million revenue, making it the largest player in the local restaurant industry, with a 10% market share.
To Malta’s Premier Capital, Romania becomes the sixth market where it holds the McDonald’s franchise and also the largest, given the 67 restaurants. It has about 60 restaurants on its five other markets together, according to its website.
Fast-food restaurant chain McDonald’s, which entered Romania in 1995, is the only foreign company in this industry that arrived directly, while rivals KFC, Pizza Hut and Subway chose the franchise route. Still, McDonald’s move in Romania is not the first; it did switch from direct operation to franchisees in other markets, as well.
It applied this business model on several markets in Eastern Europe, such as the Republic of Moldova, Bulgaria, Georgia or Azerbaijan. McDonald’s also made a similar move in South America, where a single franchisee took over the about 1,800 restaurants on that continent. McDonald’s rule is to put the business in the hands of franchisees on markets with fewer than 150 restaurants.
Such a deal means McDonald’s will get tens of millions of euros from the transfer of the restaurants and a cut of the franchisee’s annual sales.
When making such a transfer, if the new franchisee has experience in the business, it will handle things alone. If not, the general manager will get a number of shares to stay in the company and ensure continuity, market sources say. Premier Capital does have the experience but sources say Daniel Boaje, the Romanian who has been running McDonald’s for the last five years, got 10% in McDonald’s Romania.
(English version by Loredana Fratila-Cristescu)