Istanbul-based fast food company Altin Sehir Gida, operating under the trade name Mr. Kumpir, is seeking partners in order to accelerate the brand's growth and push on with regional expansion, a senior company executive has told EMIS.
"We aim to grow abroad with partners, not alone," said Fatih Demir, general manager and second generation member of the firm's founding family.
He explained that he is planning to increase the number of international branches through joint ventures or master franchise agreements in a single country or on a regional level.
"We are seeking strong partners to issue master franchise licences for the Middle East, Europe, the US and North Africa."
"In January, we signed contracts in Algeria and Iraq and we are currently in talks with other candidate countries, namely England, Russia, Malaysia, the UAE, Ukraine and the US. We have also received several offers from investors in India, Indonesia, Singapore, Saudi Arabia, and are open to hear new bids," he said.
"We can consider equity partnerships with strategic or financial investors to help the company grow quicker. The stake size can be negotiated depending on the investor's business vision and operational as well as financial power," Demir added.
The executive pointed out that the company is looking for strong financial partners with a solid knowledge of the local market, and that they would need to remain a privileged stakeholder in charge of the operational management of the outlets. He noted that the company is not working with a financial advisor.
Whilst there is no specific timeframe for the international expansion, the executive pointed out that the ultimate goal is to reach 500 branches across 50 countries within the next 10 years.
Regarding takeovers, Demir said they would look at opportunities to buy smaller chains, if and when they arose.
"We would be considering inorganic growth through acquiring a smaller chain by using horizontal integration and through acquiring main suppliers by using a vertical integration strategy. These strategies depend on the power and size of the investment," he said.
Demir underlined that the Mr. Kumpir franchise - which sells baked potatoes across 16 countries through 49 outlets - differentiates itself with an operating network that combines multiple retail concepts including the shopping mall food court shop, the high street shop and the kiosk.
"Our success story is based on the fact that we offer high profit margins - 30% on average - and a low cost structure, so it is a good opportunity for investors."
"Our biggest challenge right now is the worldwide trend of soaring real estate and rent prices. That is the reason why we are working on a new retail concept, the street corner shop, which we believe will bring a new breath to the chain, as it minimises both the initial investment cost as well as the operating cost," he said.
Regarding investment plans for expanding the brand nationwide, Demir said the goal was to open 20 branches this year, mostly in shopping malls in major cities on the west coast of Turkey and near Istanbul.
Established in 2006, Altin Sehir Gida produces and sells baked potatoes served with various toppings. Employing a staff of over 300, it claims a 33% market share and was awarded best Turkish brand in the fast food restaurant sector in terms of global expansion by UFRAD (Turkish Franchise Association) with the participation of the WFC (World Franchise Council).
In 2013, the firm posted turnover of USD 20mn, targets a rise to USD 25mn in 2014, and expects to hit USD 213mn from 500 outlets by 2024.