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Europe & Middle East Outlook

AmRest
Quick service restaurants in Europe
fast food Central Europe
casual dining industry in Europe
food & drink Europe
food franchise model
fast food franchises

AMREST HOLDINGS SE

Through the application of its unique business franchise model, AmRest has been able to acquire a significant and scalable share of some of the world’s most recognised power brands in the quick service and casual dining industries

People, Brand, Scale

Writer:

Emily Jarvis

Project Manager:

Ben Wigger

With 854 restaurants and counting, AmRest Holdings continues to maintain its status as the largest independent restaurant operator in Central and Eastern Europe. Backed by a solid franchise model and joint venture partnerships, the Company has built a portfolio of well-recognised power brands in the quick service and casual dining industries; comprising KFC, Pizza Hut, Burger King, La Tagliatella and Starbucks.

In addition to its strong European presence, AmRest has also widened its reach to pastures new via its Blue Frog and Kabb brands acquired in China, along with a growing presence in American markets.

This year, AmRest has been expanding its portfolio via merger and acquisition opportunities, ensuring continuous investment in its franchise of restaurant chains in order to grow its competitive edge.

Merger and acquisitions

January this year marked a significant milestone for the Company, starting with the opening of its 800th restaurant in Żarska Wieś near the town of Zgorzelec, Poland; situated on the border with Germany. “December 2014 was an extraordinary month for our Burger King team, who in only four weeks managed to open four new restaurants, bringing our total under operation to 40; 32 in Poland, seven in Czech Republic and one in Bulgaria,” highlighted AmRest in a news release.

Moreover, earlier in 2014, Starbucks overtook Coffeeheaven as the best-recognised brand in Poland according to a survey by ARC Rynek i Opinia. The survey also pointed towards increasing brand loyalty among cafe-goers in the country, meaning AmRest’s further penetration of the market could not have come at a more crucial time. 

This achievement was swiftly followed by the acquisition of the Bulgarian and Romanian business of Starbucks in March 2014, in a deal worth €16 million. “The acquisition of Starbucks in these two countries is a perfect fit for AmRest’s strategy, providing entrance into the Romanian market, the second largest country in Central Europe with a dynamically growing economy. Acquiring coffee shops in Bulgaria will strengthen our presence and scale across Central Europe as well,” the Company further explained.

The Starbucks brand has been part of AmRest’s portfolio since 2007, when the first coffee shop was opened in Prague. Before the above acquisition, the Company operated 67 Starbucks in three countries:  Poland, Czech Republic and Hungary. “Our 14 additional locations in Romania and five in Bulgaria will be able to leverage AmRest’s vast expertise in operating a coffee business, and Romania in particular will benefit from our top locations, strong customer demand and thus, profitability.”

Designed to strengthen the leading position of AmRest in Central Europe’s restaurant industry, the acquisition of Starbucks in Romania and Bulgaria will contribute to value creation for its shareholders, demonstrating how well its unique franchise model works.

Pizza Hut Express

Coming up with new and innovative ways to better answer customer needs has always remained at the forefront of AmRest’s vision and mission, ensuring operational excellence throughout its franchise businesses. In line with this, the Company opened its first Pizza Hut Express restaurant at Galeria Sfera in Bielsko-Biała, in the south of Poland; a new over-the-counter concept with speed of service equivalent to a quick service restaurant.

“In Pizza Hut Express, customers can see the production process, as their pizza is freshly made in front of them using local ingredients and at a cost-competitive price,” stated the Company.

With more Pizza Hut Express locations opening up this year, these smaller format quick service restaurants not only complement the casual dining experience that customers can already receive from AmRest’s chain of Pizza Hut restaurants, but strengthen the brand by creating a new way of dining for a limited capital expenditure requirement.

People, Brand, Scale

AmRest recognise that profit is not the sole purpose of the business and its 23,000 employees ensure the delivery of not only delicious food, but an exceptional service level. “With more than 120 million transactions made a year in our restaurants, it is not just about the money that changes hands,” stated AmRest’s Executive Director, Wojciech Mroczynski in 2014.

“Operational excellence is what distinguishes a good player from a great player, and we believe this is one of the reasons we have been so successful. This can only be achieved by bringing the right people on board and providing them with the right systems and tools to ensure excellence in how we operate,” he added.

The second part of AmRest’s distinctive sales proposition is leading brands. By making sure to always choose to work with reputable brands who are leaders in their respective categories and that conform to the Company’s unique business model, AmRest has been able to secure scalable business opportunities. 

“People and brands are indispensable to drive our growth and ensure the necessary scale, our third component of success formula. Scale also opens up a lot of new growth opportunities for our people and our shareholders,” Mroczynski said.

In summary, the longstanding significance of the Company’s “Everything is Possible” mantra emulates the entrepreneurial spirit of AmRest and its founders, and its ambitious international and intercontinental growth plans going forward. As a consequence, AmRest hopes to catch up with the world’s biggest player in the quick service industry, McDonalds, by 2032; fuelled by its current growth margins and its long-term vision.