Franchisee-Owned Company-Operated is a Win-Win Model For QSRs in India, says Nitika Kapur
Franchisee-Owned Company-Operated is a Win-Win Model For QSRs in India, says Nitika Kapur

It is observed that QSR has become a well-established section of the Indian foodservice industry and has further potential for growth throughout the country. Nukkadwala, the QSR chain which is owned by Vatika Group, serves authentic regional Indian food which is process-driven and quickly dispensed.   

The Nukkadwala journey started in 2014 by the Vatithroughoutne of the leading developers in the real estate industry in India. The Group covers various expansive integrated townships to trendy speciality restaurants to world-class learning environments that uphold unparalleled quality and reflect timelessness.

In an exclusive interview with Restaurant India, Nitika Kapur, Chief Executive Officer of Vatika QSR Pvt. Ltd., says a brand can control the quality of its products through the FOCO model.

What are some of the interesting facts about QSRs you came across in your journey so far?

Ten years back, it was the time when Mc Donald’s or Pizza Hut entered; they were not just the QSRs but they started the eating out culture in India. Back then, we had no knowledge about the difference between regular and quick-service restaurants. The QSR industry has evolved much in the past five years. With the growth of the corporate parks, millennium cities like Gurugram, Bangalore and the b-towns becoming fast-moving, the work-culture is increasing; the time factor has become important.

Must Read: Four Trends QSRs Shouldn't Ignore In 2019

Now the competition is between dispensing faster and the same food every time. That’s where the difference is when the global food brands like Pizza Hut and Mc Donald’s came and now what probably the brands like Chaayos and Nukkadwala are doing. It’s a different game altogether.

The key accomplishments of Nukkadwala in 2018

2018 was a break year where we gathered all our gaps, fixed them up. We opened many Nukkadwala restaurant outlets back-to-back in 2016 and 2017. We took almost a year hault, in 2018, to gather all the gaps we were facing in operations, expansions, locations, etc. But we opened two outlets in 2018. We signed a few of them are more futuristic. Now we are back again; we will be opening two outlets till March, this year.

In a start-up, there is no one year where you can actually think of an accomplishment; every year we face a new challenge and we try to fix them up.

The first year was about how we can maintain the consistency keeping the expansion plan. In the second year, we started multiplying outlets and focusing on how to maintain the operational gaps minimum. At Nukkadwala, we believe in selling efficiency.

Meanwhile, studying the repeat customers of the brand, there are many marketing strategies we had introduced. The loyalty we had earned in the last two years is phenomenal. We are very positive about it.

Your growth and expansion plans for the next two years

Nukkadwala’s growth has been nearly 28% which is very good and consistent; the customer repeat of 39% at the brand level.

The QSR chain, Nukkadwala is planning to expand and add 25 more outlets in different cities to keep the growth running.

Our current focus remains Delhi NCR. In the first phase, we looked up at the expansion only in Gurugram. We have a couple of outlets in Gurugram at Sohna Road, New Gurgaon area, Sector 21, Cyber City and MG Road. We also moved to hospitals and food courts as well. We started with Fortis Faridabad, and are in talks with other Fortis outlets. Our current focus is on retail and corporate business parks. We will be opening two outlets in corporate business parks in Noida, one in Gurugram and another in Dwarka.

Right now there is a huge gap. All the new QSRs are selling beverages. We are the only one, probably, who are selling authentic Indian food, vegetarian and non-vegetarian both, which in itself is very challenging. But there is a lot of demand. We are creating eating out culture. We are selling people what they actually look forward when eating out. As Indians, we cannot have pizzas or burgers daily. People who tend to eat from outside most of the time, miss the Indian cuisines. It’s a huge gap. And that’s why we are opening our outlets in malls, hospitals, university areas, markets and corporate parks.

Also Read: Five Reasons Why QSR Is An Evergreen Business

Depending upon the requirement of the locations, we are open.

Do you think ready-to-cook food kits could pose a possible threat to the QSRs?

When we talk about the Indian market, the problem with ready-to-use kits is it isn’t fresh. Secondly, if it is frozen food, maintaining a frozen chain by local retailers is a big challenge. It can actually lead to a very serious health issue if the chain isn’t maintained. On the other hand, when a customer walks in, we deliver to them instantly and if there is an issue, we are 24X7 available to solve and resolve it. Whereas, people who procure these kits, they keep calling the customer care; they won’t be heard.

People who don’t want to cook at home, even if they get the ready-to-do kit, if they want to go out and eat, they will do so. It’s a huge market and there is a share for everyone. Even if tomorrow we have twice as many QSRs as we have today, we will still have buyers. It’s not going to get cannibalized. India is a huge growing market; the spending power has improved, eating out culture is growing.

How would you compare the consumption patterns of people when you took over as CEO at the company with the current scenario?

We realized that slowly and gradually, with the increase in traffic and lack of mobility, everything even residential areas will become captive, apart from the corporate business parks. There was a time when people from West Delhi would come to South Delhi and Connaught Place for night-outs. But now with the demand, the city is building up. We are now seeing the growth and planning at every part of the city.

Aspects to keep in mind while designing the menu of a QSR

There is no magic mantra behind running the business. Your base needs to be strong.

Food consistency has to be a priority. Your food or beverage, whatever and wherever you are selling has to be consistent. If somebody has visited your outlet in CP or in Gurugram, they should have the same impression. Whatever you serve be it Vada Pav or Adrak Chai, the taste and flavours have to be the same. So the quality and consistency of the product are supreme and non-negotiable.

Considering the price sensitivity of our country, we should always consider the pricing and positioning of our product. I see a lot of new outlets and brand selling a product for Rs. 250-300. With the country like us, we need to be very watchful of what and how we are selling and the price. It’s basic economics.

Tips for restaurateurs who want to grow through a franchise model?

Nukkadwala is company-owned right now. But, tomorrow if we go into a franchise, it will be a FOCO model i.e., Franchisee-Owned and Company-Operated model. If you really want to have consistent growth and not see much of decline in the path of growth, it has to be a win-win model. Be it the hard work or the money involved, it has to be equal.

For a brand like Nukkadwala, I’ll always suggest going with the FOCO model. Keep quality and operational checkpoints with you and let the franchisee partner just help you in the expansion and management of the money.

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