Jubilant FoodWorks Limited has announced its decision not to renew the Multiple Unit Development Franchise Agreement (MUDFA) for the Dunkin' brand operations in India. The Board of Directors made this decision during their meeting held on March 30, 2026, following a comprehensive strategic assessment of the brand's performance and future prospects.

Franchise Agreement Details

The original Multiple Unit Development Franchise Agreement was signed on February 24, 2011, granting the company development rights to operate Dunkin' stores across India. The current development term is set to expire on December 31, 2026, and the company has decided not to seek renewal of these rights.

Financial Performance of Dunkin' Operations

The Dunkin' brand's financial contribution to Jubilant FoodWorks for FY 2024-25 reveals its limited impact on the company's overall performance:

The data shows that while Dunkin' operations contributed only 0.61% to the company's total revenue, the brand recorded a loss after tax of INR 191.24 million during FY 2024-25.

Transition and Closure Plans

Following the non-renewal decision, Jubilant FoodWorks will undertake a systematic approach to wind down Dunkin' operations. The company plans to evaluate and implement appropriate actions in an orderly and phased manner, which may include:

• Rationalization and cessation of certain operations
• Sale, transfer, or disposal of assets
• Assignment or transfer of franchise rights

All transition activities will be conducted in consultation with the owners of the Dunkin' brand and in strict accordance with the terms of the MUDFA, applicable laws, regulatory requirements, and contractual obligations. The closure process is expected to be completed on or before December 31, 2026.

Strategic Assessment and Impact

The decision to exit Dunkin' operations stems from an overall strategic assessment undertaken by the company. Despite the brand closure, Jubilant FoodWorks has emphasized that this decision will not have any material operational or financial impact on the company's overall business performance.

The company continues to focus on its core operations and other brand portfolios while ensuring compliance with all regulatory requirements during the transition period. This strategic move allows Jubilant FoodWorks to concentrate resources on more profitable ventures and optimize its brand portfolio for enhanced operational efficiency.

Goldman Sachs has raised concerns about LPG supply constraints impacting the Quick Service Restaurant (QSR) sector, warning of rising costs and near-term margin pressure. Jubilant FoodWorks is already experiencing operational impact from these supply disruptions, with risks of broader industry disruption if shortages persist.

Goldman Sachs Sector Analysis

The investment bank highlighted that LPG supply constraints are creating significant cost pressures for QSR players across the industry. Goldman Sachs warned of potential demand slowdown if the current shortage situation continues, threatening the operational efficiency and profitability of restaurant chains that rely heavily on LPG for their kitchen operations.

Jubilant FoodWorks Regulatory Disclosure

Jubilant FoodWorks has filed a formal business update under Regulation 30 of SEBI Listing Regulations, addressing LPG supply constraints affecting its store network due to ongoing geopolitical tensions in the Middle East. The company submitted its disclosure to BSE Limited and National Stock Exchange of India Limited, informing stakeholders about supply constraints on commercial LPG distribution across the country.

Current Operational Impact

The company has reported that operational impact remains limited at this stage and is being actively managed. However, LPG cylinder supply to certain parts of the company's store network has been constrained, aligning with Goldman Sachs' broader sector concerns about operational disruptions.

Strategic Response and Alternative Energy Transition

Jubilant FoodWorks has implemented strategic measures to address the supply constraints, including conservation efforts and accelerated transition to alternative energy sources. The company is actively deploying electricity and transitioning to Piped Natural Gas (PNG) across stores while maintaining constant engagement with Oil Marketing Companies (OMCs).

The company's resilient systems and processes are positioned to navigate short-term operational challenges, though Goldman Sachs' warning suggests the broader QSR sector faces significant margin pressure if supply constraints persist.