'Non-metros are the way forward'

Red Ginger, a chain of quick service restaurants, is spreading into smaller towns. Gaurav Ahuja, COO, Red Ginger Hospitality India Pvt Ltd, shared restaurant’s expansion plans with Ankur Gaurav in an interaction.

Which part of India are you focusing for expansion?

We are very careful about our expansion and make sure that each store is making a profit.  Tier-2 and tier-3 cities are our target. We will expand around 40 per cent in these cities.

What is the reason that makes tier-2 and -3 cities the way to go?

The primary reason is that the real estate cost is cheaper. Staffing costs are cheaper. Low operational costs eventually makes the margins swell. Another reason why we are eyeing tier-2 and tier-3 cities is that the number of options for the people is much less.

How much is your presence in terms of numbers and what is the ratio of non-metro outlets?

In total, we have 45 outlets out of which 20 are in tier-2 cities

What is the average investment required in these cities?

Investment required depends from location to location but on an average it is around Rs 12 to 20 lakhs.

What is the format you follow for tier- 2 and -3 cities?

We mostly choose the franchise route as it is very difficult to commute in this country. Adding to that, the locals know the place better and always have an upper hand in the operational aspect of the business.

How do you support your franchisees?

The entire set is done by us. Kitchen design is what we lay a lot of emphasis on and sourcing of equipment is also handled by us. Everything is made ready and then handed over to the franchisee. Staffs are trained centrally at our facility. We stress our franchise owners to control foods cost. We ask them to follow the recipes strictly, for example – to make a masala dosa, one requires 70 gm of potato. And, if 50 per cent potato is shelled out, it increases the food cost by up to 20 per cent. We train our staff to minimize the food costs. 

What is the USP of Red Ginger?

Our USP is that everything is made fresh and in the same kitchen unlike other quick service restaurants where food is heated and reheated and served. That way the food loses its freshness and essential nutrients are also burnt. We make sure that the entire process of cooking is done in the same kitchen and is different from other restaurants.

What are your plans for the overseas market?

We will soon be spreading in the US market. The main reason behind this is the number of people travelling has increased immensely. They are looking forward to find a branded Indian restaurant. 

Where can we see Red Ginger expanding in the immediate couple of months?

We will shortly open in Ranchi, Bhopal and Jamshedpur.

What is the expected revenue generated by each store and how soon can the franchisee get a break even?

On a monthly basis, business done by these restaurants is around Rs 6-7 lakhs per month. And they are expected to break even in less than a year time.