Fast on Move Easy on Returns: How Fast Casual is Biting a Larger Share
Fast on Move Easy on Returns: How Fast Casual is Biting a Larger Share

Fast casual industry has changed the restaurant scenario globally. And, we can call it the next wave of limited-service restaurants that might change how India used to dine out entirely in last few years. A fast casual restaurant combines elements of quick-service with casual dining for an experience that is relatively low in cost but often provides ambiance and varieties of food more associated with sit-down dining.

With freshness to the table, customization to one’s preference and a much more personalized experience, fast casual restaurants are here to stay for long.

When Consumer Becomes the Driver

“Consumers are getting more adventurous and open with their palate which is adding to overall eating out culture and driving growth in consumption,” shares Saurabh Khanijo, Director, Welgrow Hotel Concepts, whose restaurant Shophouse by Kylin has got wonderful response in NCR.

As per industry experts, consumers have become much more experimental and adoptive. Karan Tanna, CEO, Yellow Tie Hospitality, says, “Consumers now prefer concepts that are ‘younger and cooler’ and are moving away from mundane fine dining concepts. Consumers not only want good food and service but also prefer some kind of an added advantage and experience; it could be a live music gig or some kind of theatre happening in the plate. That’s why we see popping up of lot of modern fast casual restaurants.”

Business Model

To start a fast casual restaurant, typical investment required is anywhere between 30 lakhs to 85 lakhs depending on the area of the restaurant. Ideally, a fast casual restaurant requires an area of 300-1,000 sq. feet. The startup cost includes expenses of Rs 18 lakhs on kitchen and bar equipment, Rs 3.6 lakhs as interior designer fees, and  one-time franchise see may go upto Rs 20 lakhs.  

A fast casual restaurant may require 10-18 employees with total salaries ranging from Rs 2 lakhs to Rs 3 lakhs per month. While the rent could take up Rs 3.5 lakh depending upon the location, raw material expenses will be roughly Rs 7 lakhs and Rs 2.25 lakhs go in miscellaneous expenses including electricity and water.

With a monthly revenue of Rs 25-30 lakhs and monthly expenses of about Rs 15 lakh, the owner can make gross profits in the range of Rs 10-15 lakhs. In a typical franchise setup, businesses can break-even in 24 - 30 months.

“Brand awareness is the key factor. We’ve realised that it is all about quality, reasonable pricing and providing a unique experience, which helps in getting good returns,” points Krishna Gupta, Managing Director, 1441 Pizzeria, which has an average footfall of about 4,000 per month with average spending of Rs 450-500 per person.

Why Franchise?

According to most of the industry experts, franchise business is the best way forward in this space. “Restaurant business comes with lot of challenges as far as kitchen operations and training is concerned. Having a franchise partner who can give ready-to-serve recipes (so that dependency on the outlet level staff is reduced) and provides training will make it easier for the owner to operate the outlet. Hence, franchising is best option in this space,” adds Tanna who provides end to end solution to its franchise partners.

Gupta adds, “Starting your own restaurant is not easy and a lot of startups shut within 15 months. We have a tried and tested concept which is evergreen without most of the unpleasantness that comes with starting something new. We have a central kitchen which would supply all the goods and food items and also a training team in the back-end. This is over and above all the manuals for operations, HR, training, food and the customer experience that we provide.”  

Future Prospects

As the fast casual concepts are more open to customers where they are aware what is being cooked/baked for them, it automatically becomes more scalable. From concepts like ‘do-it-yourself,’ wherein you can customize and design your own food and decide on what toppings and sauces to be added on your favourite pizza it is becoming a favourite among young crowds who always look for some fun and quirkiness on the menu.

“If the customer likes the food and the complete experience, he visits at least 3 times a month as per our repeat customer ratio,” adds Khanijo who believes that such kind of concept has got a long shelf life and is looking to expand Pan India focusing on metro on the first go.

“We are running 25+ outlets of Genuine Broaster Chicken across pan India and the response has been great. We are looking at opening around 60 more operating outlets in India by the end of this year across segment,” adds Tanna who will be deepening their presence in the locations they are already present. “We are looking at places such as Varanasi, Udaipur, Ludhiana, Chandigarh, Bhopal, Indore, Nagpur, Nashik and Kochi, among others,” he further adds.

And, hence a dining experience where higher-quality ingredients, enhanced hospitality, and cozier dining rooms could mesh with lower prices and counter service, fast casual is the future of restaurant business in India.

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