According to data, there are approximately 42 McDonald’s restaurants per 1 million people in the US, while the ratio is 20 per 1 million in the UK. In Central Europe, the number drops to only 12 McDonald’s for every 1 million people. This indicates a significant opportunity for quick-service restaurants, particularly in the burger and chicken categories, which are still not well-established in the region.
Olgierd Danielewicz, the chairman of Rex Concepts, a new platform under McWin Capital Partners, sees this as a promising opportunity to expand Burger King and Popeyes franchises in Czech Republic, Poland, and Romania. Their master franchise and development agreements plan to open 600 restaurants in these countries over the next decade, despite the challenging scale of the project. However, the experience and expertise of McWin’s founders and leadership team may help overcome these hurdles.
Henry McGovern and Steve Winegar established a private investment company in 2021, which has a unique name that combines their surnames. The firm is based in Prague, Czech Republic. McGovern is the former CEO and founder of AmRest Holdings, which began with a single Pizza Hut location in Poland and grew to operate over 2,300 restaurants including Burger King, Starbucks, and La Tagliatella in 25 countries. In 2019, he sold his shares in AmRest to Finaccess Capital, a private equity fund based in Mexico, for $300 million. Winegar is the founder of Restauravia Grupo Empresarial, a Spanish restaurant company, and a former senior executive of Grupo Zena, which operates over 400 restaurants. He was also on the board of AmRest and served as a former board member of the multinational chain Telepizza.
To add to this, Danielewicz has a previous working relationship with AmRest. He served as chief operations officer during his 21-year tenure with the company and contributed to the expansion of the KFC business to 700 units in Europe, as well as the reintroduction of Burger King to Poland in 2007.
The McWin Restaurant Fund, which raised 525 million euros in August 2022, was started by McGovern and was seen as the perfect fit for Danielewicz. This was the second fund raised by the firm. McWin utilized the fund to acquire BK SEE Poland S.A, a 20-unit Burger King franchisee in Poland. The agreements for Burger King and Popeyes are the second investments for the fund.
According to McGovern, the COVID-19 pandemic disrupted the restaurant industry and created an opportunity for McWin to leverage its extensive experience across various markets and brands.
To Henry McGovern, many entrepreneurs and brands require assistance with international expansion, digital strategies, and the complexities of scaling brands and teams. He believes that the restaurant industry provides an excellent investment opportunity for growth and cash flow, and investors see McWin as uniquely qualified to lead this type of investment. McWin’s first fund, the McWin Food Ecosystem Fund, acquired a majority stake in Burger King Deutschland, which is the master franchisee in Germany with over 100 company-owned units and 600 franchised restaurants. Olgierd Danielewicz, a member of McWin’s team, recognizes potential in the region’s quick-service restaurant industry, which has evolved over the past 30 years.
To Olgierd Danielewicz, QSR (quick-service restaurant) is a popular and modern category in Central Europe that appeals to consumers of all economic backgrounds who value cleanliness and quality. He believes that the category is the most resilient in the foodservice industry, with value being a critical factor. Rex Concepts aims to develop Burger King in Poland, the Czech Republic, and Romania, expanding the brand to include different meal occasions such as breakfast, and strengthening its chicken platform. Although 12 out of the 20 Burger King restaurants in Poland are drive-thru locations, site selection, permitting, and construction can take up to 18 months for development.
Food courts are also popular, and Danielewicz said interest is high from shopping malls and developers, particularly for Popeyes. KFC, which has about 500 restaurants across the three countries, is “pretty much the only chain serving fried chicken.”
“Popeyes, our rationale, it’s the origin, the Louisiana flavor,” he said. “It’s high quality, very appealing to customers, and Popeyes is also offering seafood, which isn’t offered by the big competitor.” The brand itself is “vibrant, cool and dynamic,” and Popeyes “plays from a challenger standpoint, like Burger King.”
Prague, along with Poland’s capital, Warsaw, are initial targets to introduce Popeyes in the region, and Danielewicz said the first 12 to 18 months will be focused on opening company stores to prove the brand in the market.
Rex Concepts is also navigating an inflationary environment that is driving higher prices for electricity, gas and food, he said. And as a country, he added, Poland is still working to address the needs of the more than 4 million people from Ukraine who have fled since Russia’s invasion last year. “It’s definitely an environment that requires a lot of work and a lot of creativity,” he said.
‘Untapped potential’
The fast food chain Popeyes has a total of 4,091 locations with more than 70% of them located in the United States, while only 1,170 stores are located outside of the US. Burger King, on the other hand, has a larger international presence with a total of 12,747 restaurants outside of the US out of its 19,789 total locations.
Lucas Muniz, the senior VP of global development for Restaurant Brands International (RBI), which owns both Burger King and Popeyes, said that the company plans to expand Popeyes in emerging economies where QSR is a key category within the foodservice industry. Popeyes has signed an agreement with Eldar Abdrazakov and Centras Group to open multiple locations in Kazakhstan.
The brand’s international units’ systemwide sales for Q4 2021 were $271 million, while Burger King did $3.9 billion in sales from its locations outside the US. RBI, which recently acquired Firehouse Subs, plans to expand its international footprint by identifying opportunities across Europe, the Middle East, Africa, the Asia-Pacific and Latin America, and adapting the concept outside of the US.
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