A report says that the company’s plan to add 267 restaurants over three years, while same-store sales hover around 3 per cent, creates unit economics pressure that only margin expansion can offset
Highlighting the operational challenges facing quick-service restaurant (QSR) operators in Asian markets, a report has stated that Restaurant Brands Asia faces a strategic trade-off between aggressive network expansion and same-store sales momentum.
A report by Datum Intelligence added that the company’s plan to add 267 restaurants over three years (50 per cent base growth) while same-store sales hover around 3 per cent creates unit economics pressure that only margin expansion can offset. New units must achieve productivity levels justifying capital deployment even as the existing base demonstrates limited organic growth, it added.
The margin expansion target to 70 per cent provides strategic flexibility but raises questions about long-term competitiveness. The report further explained that achieving 70 per cent gross margins while growing same-store sales only 2 to 3 per cent annually suggests the company is extracting value from existing customers rather than expanding the addressable market.
“The company must determine whether low-single-digit growth represents an acceptable new normal that can be offset by aggressive unit expansion and margin discipline, or whether more fundamental repositioning is required,” Datum Intelligence highlighted.
The report added that the company’s ability to simultaneously expand its footprint, improve margins and balance same-store sales will test whether scale and efficiency can compensate for eroding brand momentum. The company currently operates 533 restaurants in India as of the second quarter of the current financial year (Q2FY26), with ambitious expansion plans targeting 60 to 80 new openings annually to reach approximately 800 restaurants by FY29, as per the report.
Despite modest same-store sales growth, the company maintains a robust gross profit margin of 68.3 per cent in Q2FY26 and targets approximately 70 per cent by FY29. The report noted that this margin trajectory suggests the company is prioritising profitability over traffic growth through menu pricing discipline, operational efficiency gains and potentially reduced promotional intensity.
