Movenpick Foods to take franchisee route  ( August '31,2001, FE)

IN a changed strategy, the $1-billion Swiss food and restaurant major Movenpick Foods has decided to take the franchise route to open its ice cream and coffee boutiques (ICCBs) in the country rather than opt for company-owned outlets

The company—part of the Zurich based Movenpick Group—has joined hands with Mr Ravi Jaipuria-promoted Devyani Foods Limited, which are also the Pizza Hut franchisees for northern India, to open Movenpick ICCBs and express counters across Delhi and NCR.

Admitting that the company has decided to give up its decision to open company-owned outlets, Movenpick’s South Asia general manager, Mr Neeraj Jain said that this was because the company did not get the permission from the government to retail Movenpick ice creams since they are being imported. ‘‘According to government regulations, imported products cannot be retailed by a foreign company directly,’’ Mr Jain said at the opening of its first ICCB in India.

The company imports its ice creams from Zurich and is present in the country only through a marketing liaison office. The company is going to set up a 100 per cent subsidiary soon. In the last one year, the company has invested about Rs 4 crore in the infrastructure/logistics management of its business partners to maintain quality control.

Located at the posh Basant Lok in New Delhi, the Movenpick ICCB is spread over an area of 750 sq feet and will offer a range of ice creams and speciality coffee and desserts. The company plans to open three more outlets—of these two will be express or takeaway counters—in Delhi by October, this year. Devyani plans to invest about Rs 1 crore in setting up outlets in Delhi. Commenting on the viability of the outlets, Mr Jaipuria said that it will need transactions of Rs 50,000 per day per outlet to break even. ‘‘I think it should be viable,’’ Mr Jaipuria said. Apart from the high-class ice cream parlours, the company retails its products through select top-end outlets besides catering to institutions and hotels. The company has also opened its ICCBs in Dhaka, Kathmandu and Karachi before opening in Delhi. The company intends to occupy a niche position providing quality products.

Movenpick expects to notch up sales worth Rs 8 to 9 crore by the end of year 2001.