McDonald’s Maltese operator granted ‘open brief’ in Greece

Premier Capital, the operator of the McDonald’s franchise in Malta and the Baltics, has been granted autonomy as it drafts a business strategy to develop and grow the brand’s operation in Greece, managing director Melo Hili told The Times Business.

The wholly-owned Maltese company has just been appointed developmental licensee for McDonald’s in Greece. Yesterday it officially took over 19 restaurants in and around Athens and has been mandated to become key in the future development of the brand in the country.

Premier Capital currently owns eight restaurants in Malta, 10 in Estonia, nine in Lithuania, and eight in Latvia.

“Our relationship with McDonald’s pretty much allows us an open brief. We are free to adopt any strategy we see fit to help grow and improve our business,” Mr Hili said this week.

“McDonald’s is obviously at hand to help us develop and shape this strategy, however the end decision is very much ours. As one can see from our track record to date, our internal brief is obviously growth. We want to grow the business and the strength of the brand as much as possible. We clearly identify the fact that improving brand strength will help continue to propel our growth in the years to come.”

Mr Hili said Premier Capital was confident about the prospects for the Greek operation and the key challenge was “to continue to remain relevant in the lives of the Greek people”.

He pointed out Premier Capital’s experience had shown the McDonald’s brand to be truly resilient. If managed correctly, it had the ability to be “crisis relevant” and the company hoped to ensure the deployment of an appropriate strategy. Greeks, he said, were under immense pressure both economically and socially, and the next few years were going to be challenging.

“Although our specialists have spent the last months looking into the market, experience has shown us that it is only when one truly takes over that one starts to understand the ins and outs and the complexities of the task at hand,” Mr Hili added. “It is only at this point that one can map out possible changes, solutions and improvements. It’s also key to understand the cultural context within which one is operating.

Mr Hili said Premier Capital had been assigned the Greek development licence on the strength of its track record and its strong relationship with the McDonald’s corporation.

For some time, he said, the corporation had been keen to identify the right partner to assign a Greek developmental licence with a view to help grow the market in a focused, consolidated manner.

Two years ago, a corporation official floated the idea with Mr Hili but he admits that although he did not think much of it at the time, he was interested in the idea and later expressed interest in “at least discussing the possibility”.

“The truth is, our relationship with McDonald’s is strong and it has developed and grown very well over these last years,” Mr Hili continued. “The corporation has seen and appreciates the great work we have done first in Malta and then in the Baltics.

“The growth strategy deployed in these markets, even during tough times, has shown that we are committed to growing the business and the brand in the markets where we operate.

“We have invested heavily in both new stores and re-imaging the existing ones. We have also deployed many other fundamental changes to make the business more efficient and all this has paid dividends; McDonald’s as our commercial partner obviously benefits directly from this.

“This relationship put us in a strong position when we started to discuss a possible collaboration in Greece. Greece is a big country and although it is going through a tough time there are plenty of opportunities for those who are brave enough.”

Greece’s addition to Premier Capital’s portfolio will not have a direct impact on its business strategy in Malta, Mr Hili added. The company operates markets independently of one another, although it exports systems and best practices across its network.

Premier Capital acquired the Malta operation for McDonalds in 2005 and it ventured into the Baltics with the brand three years later. It has annual revenues of €50 million, provides jobs for 2,000 people, and has until now served more than 24 million customers a year at its 35 restaurants.

Asked whether Premier Capital intended to turn to the market with an offering in view of this latest development, Mr Hili said the company had “no such plans” at present but the option was always open.

“Should we opt for such a move, then we would have an interesting investment proposition that would definitely interest investors,” Mr Hili said.