Farsons to downsize fast food outlets

I think it’s surprising how many loss-making operations are still open – Louis Farrugia

The managing director of Farsons has confirmed that the company is preparing to downsize its operations at its fast food outlets.

Louis Farrugia told The Malta Financial and Business Times that its subsidiary company Food Chain, which runs Pizza Hut, Burger King and Kentucky Fried Chicken, will be offering early retirement to workers and tailoring operations at head office.

He neither confirmed nor denied that some of the outlets would be closing altogether, saying more details of the plans would be announced in the coming weeks. Mr Farrugia did, however, say that the company could not continue operating outlets that were incurring great losses.

"It is not an easy choice to make, but ultimately, I’m charged with the responsibility of ensuring we increase profitability and sometimes one has to make a decision of whether to move forward and acquire new franchises or sometimes downsize operations," he said.

"The objective must be to increase the profitability of the business for the benefit of both the shareholders and the employees."

Food Chain began operating in 1993 and now has 10 outlets from its three franchises – four Pizza Huts, four Burger Kings and two KFCs.

Asked why believed the business venture had failed to produce the profits expected, Mr Farrugia cited fierce competition as a major factor.

"I’m sure that Food Chain is not the only group of fast food outlets in operation failing to make money at present," he said. "In fact I think it’s surprising how many loss-making operations are still open."

Read full interview with Louis Farrugia