Czech Republic

U nlike retail - and even hotels - the restaurant sector in the Czech Republic has few chains, and those that do exist tend to be in foreign rather than local hands.

Of close to 40,000 restaurants, only 3% are part of a chain while, elsewhere in the developed world, the share is more than 10%, says Jaromr Bernek, director of Czech-based Mag Consulting.

"Altogether, I would put the number of restaurant chain [operators] in this country at around 30," he says, "the biggest and best known being, of course, McDonald's and KFC."

So, chains account for most of the sales in the Czech retail sector, but barely a fraction in the restaurant sector. The reason is simple - local entrepreneurs just do not have the capital. That, coupled with the fact that opening a new restaurant is hardly a quick return on investment.

"Those Czechs who have the money do not go into restaurants - and if they do, it is merely to complement accommodation services," explains Ales Dockal, vice-president of the country's hospitality organisation, HO.RE.CA.

Beer-makers are among the few who have the funds to invest in chains in the Czech Republic (see panel). "Our breweries are now mostly owned by rich foreign companies," says Dockal.

And then there is the fact that, during the 40 years it was communist, most of the country's restaurants, especially the cheaper ones, all looked the same. "Their new private owners now try to differ from each other," says Pavel Hlinka, president of the National Federation of Hotels and Restaurants.

McDonald's and KFC account for about 80% of all chains in the Czech Republic, so it is only logical that the prevalent outlets are fast-food restaurants - and this will continue to be the case, at least in the near future, according to Bernek. Two notable international restaurant chains still not present in the Czech Republic are Burger King and Starbucks.

Many Czech hospitality experts are convinced, however, that the future of chains in this sector of the economy lies in pubs. Bernek suggests:
"They would be offering only one brand of beer plus a limited selection - say, no more than five - of warm meals typical for the local cuisine. These would be prepared in special serveries elsewhere and then frozen, so that they could be consumed within five days."

Dockal agrees. "I am wondering who will follow the example of the Staropramen brewery and launch another such chain. If I, for one, had the necessary billion crowns, I wouldn't hesitate one minute," he says.

Pubs in such a chain would not necessarily have to follow in the footsteps of McDonald's, but what they would all be obliged to have is the same ambiance and typical Czech fare. Dockal says: "It would be absurd if you were surrounded by loud techno music from its speakers and offered pizzas or tiramisu."