A standoff between Pizza Hut’s two largest franchisees in India—Sapphire Foods and Devyani International—has led to a halt in joint advertising efforts across overlapping territories, impacting customer footfall and sales.
Sapphire Foods Group CEO Sanjay Purohit revealed during the company’s post-earnings call that the advertising pause began in the January-March 2025 quarter due to disagreements with Devyani International over marketing strategies and the return on investment from mass media campaigns.
“Starting this quarter, we’ve not been able to invest in mass media advertising for Pizza Hut. That’s had an impact on our transactions,” Purohit said. “The difference of opinion between us and our sister franchisee (Devyani) centers on whether such advertising delivers a tangible uptick in sales.”
While Yum! Brands—owner of Pizza Hut, KFC, and Taco Bell—is aligned with Sapphire’s stance on advertising, the impasse with Ravi Jaipuria-led Devyani International has left key joint markets like Maharashtra, Karnataka, and Andhra Pradesh without coordinated promotional support.
Sapphire Foods manages Pizza Hut outlets in South and West India and operates over 900 stores. Devyani International, the larger of the two with 2,000+ stores, handles the brand’s presence in North and East India. The overlap in operations has made collaborative advertising critical in several high-traffic markets, including delivery-only kitchens, takeaway counters, and airport outlets.
Purohit suggested that resolving the issue could take one to two quarters. “This difference is rooted in our assessment of data. The only way to resolve it is to prove—quantitatively—that advertising drives higher transactions,” he added.
The dispute comes at a time when India’s quick-service restaurant (QSR) sector is witnessing a general slowdown, making effective marketing even more crucial for sustaining momentum.