One of the largest meat producers in the country, ABH Miratorg, Viktor and Alexander Linnikov, is thinking about replicating its Steak & Burger restaurant chain through a franchise. This will allow the holding to expand its distribution. But finding partners can be difficult. Such formats were previously in demand primarily in shopping centers, which were most affected by restrictions due to COVID-19, and the demand for a franchise in the catering segment during the crisis fell to a minimum.
ABH Miratorg’s intention to launch a franchise of its fast food restaurants “Steak & Burger” (formerly called “Burger & Fries”) became known from a vacancy on the HeadHunter portal. The holding is looking for a development director who will have to develop business models for the franchise, principles of interaction with future partners, and support them when opening outlets.
Miratorg Viktor and Alexandra Linnikov is one of the largest Russian producers of beef, pork, poultry, etc. He also operates a supermarket chain of the same name. According to Infoline estimates, Miratorg’s revenue increased by 7% in 2020 to RUB 127.5 billion.
Miratorg launched its own catering points in 2017. Initially, the establishments were opened at supermarkets and butchers of the holding, then points appeared in separate premises. The menu includes burgers for 295–445 rubles, steaks costing up to 1.8 thousand rubles, potatoes for 155–205 rubles, soups, drinks, etc. Today, Steak & Burger has about 15 points in Moscow, Moskovskaya , Bryansk and Kursk regions, in Tula. In addition, Miratorg, together with restaurateur Arkady Novikov, is developing the #Farsh chain, which at the end of 2018 launched the sale of a franchise across the Russian Federation. The first installment is from 6 million rubles, royalties and marketing fees – 6% and 1%, respectively. # Farш restaurants operate in Moscow, Moscow region and St. Petersburg. Miratorg did not answer the questions.
Franshiza.ru expert Anna Rozhdestvenskaya notes that for a manufacturer, franchising allows not only to reduce risks when building a network, but also to establish an additional distribution channel and popularize the brand. In her opinion, the Steak & Burger franchise can provide for investments from 8 million rubles. per point at the food court and from 13 million rubles. for an establishment outside the mall. The lump-sum contribution for such franchises ranges from 600 thousand to 2 million rubles.
According to Ms Rozhdestvenskaya, the crisis has prompted many brand holders to discount lump-sum payments and invent truncated formats, such as a delivery-only restaurant. Restcon executive director Andrey Petrakov is confident that Steak & Burger can be profitable only in the largest cities. At the same time, the expert sees the risks of a restaurant’s dependence on one meat supplier.
The Primebeef Bar of one of Miratorg’s competitors in the marbled beef market of the Zarechnoye Group of Companies Sergey Nitsenko is already developing under a franchise. Partners are offered the format of a grill bar, restaurant, food truck and boutique. Steve Aralov, Development Director of the Primbeef Bar chain, says that the demand for the franchise is high, but the brand holder is selective in his approach to potential partners. According to him, the Primebeef Bar has recently opened in Kaliningrad, Kazan, and an exit to the near abroad is being prepared. In general, ten new establishments are planned to be launched in 2021–2022.
But Anna Rozhdestvenskaya notes that interest in burger franchises peaked a few years ago, and restrictions due to COVID-19 reduced demand to a minimum: most establishments in the regions opened in shopping centers. According to her, most of the Steak & Burger outlets still operate at Miratorg supermarkets and after the launch of the franchise, the holding company can offer partners to buy out corporate outlets altogether.