Multiplex operator PVR Inox recently signed a joint venture agreement with Devyani International, which runs quick-service restaurants like KFC and Pizza Hut. Devyani will own 51 percent of the joint venture, with PVR Inox holding the remaining 49 percent stake.
PVR Inox executive director Sanjeev Bijli said the joint venture will allow the multiplex chain to grow its pre-ticketing food and beverage business. Currently, it earns most of that revenue post-ticketing, which is only when a consumer buys a movie ticket.
"We felt this partnership was a win-win one because we get to have some food and beverage revenues, which are pre-ticketed. We can get the opportunity to come up with some branded food courts," Bijli said.
He noted that most shopping malls lack branded food courts, and PVR Inox, which has attracted 150 million moviegoers in the past year, can add value in this area. The branded food courts are expected to help PVR Inox increase its revenue among existing consumers.
PVR Inox says it will bring value to the joint venture in the form of negotiating better rental deals and locations with real estate developers. The food courts will be located adjacent to PVR Inox cinemas.
PVR Inox CFO Nitin Sood said the initial plan was to open five or six food courts, adding, "We are still in the process of developing a long-term business plan."
Bijli said he is expecting movie ticket sales to improve post-elections due to a strong slate of Hindi and Hollywood movies.
In the coming months, PVR Inox is planning to add some 50-60 screens, while at the same time phasing out 60-70 screens.
The company is also adding screens through a franchise-owned company-operated model under which the developer will make the entire investment in the cinema property while PVR Inox will generate revenue through a management fee.