Wissol Group Has Big Plans for 2019, Despite Alleged Financial Struggles

One of Georgia’s largest business conglomerates, Wissol Group, is coming under scrutiny for its alleged failure to repay a $1.5 million loan on schedule.

100% of the shares in Wissol Group are owned by D&B Georgia, a limited liability company headed by Georgian brothers Samson and Levan Pkhakadze. Samson “Soso” Pkhakadze serves as President of Wissol Group and Chairman of the Wissol Board of Directors while younger brother Levan Pkhakadze is Vice President of Wissol Group and Deputy Chair of the Board of Directors of Wissol Petroleum Georgia.

D&B Georgia took out a $10.6 million loan from OPIC, the United States’ Overseas Private Investment Corporation, in 2015 to begin opening franchises of Dunkin Donuts restaurants in Georgia. The project description for the loan’s official public information summary explained that the brothers planned to establishment as many as 35 Dunkin’ Donuts restaurants in Georgia. The loan was issued on a nine-year repayment schedule with a 24-month grace period. The summary also explained the project’s proposed economic impact in Georgia, saying it would be “highly developmental.” Specifically, providing “much needed economic stimulus in Georgia at a time when the economy and foreign direct investment are declining due to the Russian-Ukrainian crisis. The Project will have strong human capacity-building impacts by creating hundreds of new jobs through the development and operation of up to 35 quick-serve restaurants in both rural and urban locations of Georgia, a country with high unemployment, especially amongst youth. The majority of quick-service restaurant jobs, like those expected to be created by the Project, are typically held by young people.”

Following the company’s initial success, they took out a smaller loan for $1.5 million in February 2018 to further expand the chain. According to the company’s 2018 annual financial report, as reported by Caucasus Business Week (CBW), D&B management are in the process of attempting to restructure the loan to achieve a more favorable payment schedule.

Although Dunkin Donuts has been expanding in Georgia, with six new restaurants opening in 2018, CBW reports that their revenues are down several million over the last two years. A November 27 letter from Soso Pkhakadze assured stakeholders that D&B investors are willing to provide additional financial resources to the company, which plans to continue normal operations in the future. Another six new Dunkin Donuts restaurants are planned for 2019.

Wissol Group describes itself as “one of the largest business groups in Georgia. With the largest chain of petrol and CNG stations and with aviation fuel deliveries, Wissol Group is the leading player in the country's energy sector.” Wissol Group includes several major Georgian companies and franchises: Wissol Petroleum, Vianor vehicle service centers, Dunkin Donuts, Wendy’s, grocery store chain Smart, outdoor advertisement service Alma, and real estate and construction firm Vellagio. Last week, Wissol Group announced they are adding a new venture to the list – a chain of pizza restaurants. The restaurants will initially be integrated into existing Wendy’s locations throughout Georgia, with plans to expand them as free-standing restaurants.

“We have worked on establishing the pizzeria network for about 18 months. Based on the corresponding research of the consumer market, we confirmed that pizza is an in-demand product in our country and a high-quality product will bring real success,” said Wendy’s and Dunkin Donuts Georgia General Director Giorgi Mshvildadze. He continued, “We believe the pizzeria project will be excellently implemented within the Wendy’s network. We developed the pizzeria concept and submitted it to the Wendy’s [corporation], along with the brand platform, corporate symbols and so on. Three months ago, we received consent to test the project. We arranged a pizzeria corner at the Wendy’s restaurant in Kutaisi…the pizza sales exceeded expectations by 2.6 times. As a result, Wendy’s gave its final consent to implement the new project.”

Wendy’s pizzerias will offer five types of pizza: Baconator – named after one of Wendy’s most popular and well-known burgers, Four Cheese, Margarita, Pepperoni, and Vegetarian. All five toppings options will cost 11.40 GEL ($4.30) and will be 33 cm in diameter.

By Samantha Guthrie