Aug 26 (Reuters) - U.S. pizza chain Papa John's

International plans to return to India by October, said

a master franchisee executive, aiming to open 650 stores over

the next decade in a market where fast-food chains have been

struggling to sustain sales growth.

The world's third-largest pizza delivery company, which

exited India in 2017 citing underperformance, follows U.S. rival

Little Caesars, which opened in India earlier this year with a

target of 100 stores by the decade-end.

Papa John's will open its first store in the southern city

of Bengaluru, Vish Narain, managing partner at Pulsar Capital,

told Reuters. The Indian investment house and UAE-based PJP

Investments Group are Papa John's joint master franchisees in

India.

The pizza chain had revealed plans in April 2023 to re-enter

the "complex market".

Its return comes as fast-food chains grapple with weakening

sales in the country, as cash-strapped urban consumers - the key

customer base - cut back due to slow wage growth and as rising

competition bites.

One of India's two Pizza Hut franchisees, Devyani

International, has been closing underperforming

stores, while the smaller operator, Sapphire Foods India

, has been cautious with its expansion plans.

The company will also face stiff competition from Domino's

Pizza, which has more than 2,200 outlets in India, Pizza

Hut with about 950 stores, and smaller upscale chains such as

Pizza Bakery and PizzaExpress.

Pulsar Capital is betting on India's long-term potential,

mirroring consumer-facing companies such as Dove soapmaker

Hindustan Unilever and brewer Heineken that

are continuing to invest in the country with an eye on its

population of 1.4 billion.

The fast-food "category is under-penetrated, so we are many

years away from saturation," said Narain.

Papa John's plans to tailor its pizza to local palates while

also offering its signature pies, joining fast-food rivals

offering similar fare. KFC ( YUM ) sells a paneer zinger burger,

Domino's offers a chicken tikka pie, and Subway serves a

potato-patty sandwich.