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Rosinter Restaurants is one of Russia's oldest restaurant holdings, operating chains of outlets in cities and at transport hubs — in airports and at railway stations. Some of the outlets operate under franchise. The shares trade under the ticker ROST.
The restaurant business rests on three cost lines: rent, food and staff. None of them can be cut quickly, while revenue depends on guest traffic, which changes in an instant. Hence the high sensitivity to any downturn.
Location decides almost everything. An outlet in an airport or at a railway station gets traffic that does not depend on advertising: a passenger is waiting for a flight and eats wherever they happen to be. The flip side is that a drop in passenger traffic wipes out the revenue of such an outlet instantly, which is exactly what happened during the period of flight restrictions.
Franchising changes the economics: the holding grants a partner the right to operate under its brand and collects royalties without investing in the opening. Revenue is lower, but the risk is not the holding's either.
Outlets that the holding runs itself, bearing all the costs.
Outlets in airports and at railway stations with traffic that does not depend on advertising.
Granting the right to operate under the holding's brand in exchange for royalties.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
It operates restaurants of several brands in cities and at transport hubs — in airports and at railway stations — and also develops its chain through franchising.
The brand owner grants a partner the right to open an outlet under its name, with its menu and standards, and receives payments in return. The partner pays for the opening and the operation, so the chain grows without investment from the brand owner.
Their traffic does not depend on advertising: a passenger is waiting for a flight and eats wherever they happen to be. But the reverse is also true — when passenger traffic falls, the revenue of such an outlet disappears instantly.