"Subway to Open More than 100 Restaurants in the Next 12 months"

The Indian Quick Service Restaurant (QSR) industry is at a pivotal moment in 2025, marked by rapid expansion, shifting consumer dynamics, and operational challenges. With the market projected to reach $38 billion by 2029, the sector continues to experience strong growth, driven by changing lifestyles, increasing urbanization, and rising disposable incomes. However, with this growth comes complexity— inflationary pressures, evolving customer expectations, and heightened competition are reshaping the industry.

While the absolute spend on dining out is increasing, its share within overall private consumption is declining due to inflation, making value-driven offerings more critical than ever. At the same time, input costs for raw materials, packaging, and logistics continue to rise, increasing price sensitivity among consumers. In this evolving environment, QSR brands must strike a delicate balance—delivering affordability without compromising on quality, speed, or experience.

The New Indian Consumer 

India’s QSR consumers in 2025 are more experimental, highly demanding, and price-conscious than ever before. The growing preference for global flavors, customized meals, and convenience-driven dining options is pushing QSR brands to continuously innovate. However, while international flavors remain relevant, there is a strong resurgence of home-grown brands, which are challenging global QSR chains by combining quality with deep regional insights.

Consumer behavior is also highly occasion-driven, with choices varying based on dining context—be it dining out, ordering in, or opting for hybrid meal solutions. Value perception plays a crucial role, as customers expect high-quality meals at competitive prices, making affordability a dominant factor in decision-making.

Additionally, Tier 2 and Tier 3 cities are emerging as key growth markets, with consumers in these regions expecting metro-level quality and service. The organized QSR market is set to grow from 15% to 21% by 2030, while the unorganized sector is expected to shrink from 52% to 41%, reinforcing the increasing demand for structured, reliable dining experiences.

With over 400 organized QSR players in the market, customer loyalty has become increasingly fluid. Even minor lapses in quality, service, or delivery efficiency can push consumers to switch brands. Delivery, which was once a differentiator, is now a baseline expectation, and the focus has shifted toward speed, reliability, and seamless service experiences.

Key Operational Challenges 

Despite rapid growth, profitability remains a concern for many QSR brands. While post-COVID expansion saw a surge in new outlets, revenue growth has not kept pace with store additions, creating financial strain. Several key operational challenges are shaping the industry landscape:

Soaring Real Estate Costs: High rental prices in urban areas are putting pressure on margins, particularly for dine-in-centric formats where sustaining growth in Average Daily Sales (ADS) has become increasingly challenging. As a result, QSR brands are shifting toward smaller format outlets, including kiosks, express setups in malls, airports, and metro stations, to optimize operational efficiency while maintaining reach.

Intensifying Competition: With the QSR market growing more crowded, investor-backed pricing wars and aggressive expansion strategies are straining profit margins. Delivery aggregators now connect over 276,000 restaurants, vastly outnumbering the 5,500 branded QSR outlets, making market fragmentation a growing challenge.

Aggregator Dominance: The duopoly of food delivery aggregators remains a double-edged sword for QSR brands. While platforms like Zomato and Swiggy expand customer reach, their high commission rates (15%-30%) significantly impact profitability. Additionally, aggregators control valuable customer data, limiting brands’ ability to build direct consumer relationships and execute personalized marketing strategies.

Labour and Compliance Issues: Staffing continues to be a major challenge, with high attrition rates leading to frequent recruitment and training costs. The industry’s reliance on a transient workforce increases operational disruptions, while compliance with evolving labor laws and minimum wage regulations adds another layer of complexity.

Shift to Delivery-First Models: The pandemic accelerated the transition to delivery-first dining, reshaping consumer habits and altering the revenue mix for physical outlets. With delivery platforms expanding consumer access to more restaurants and cuisines, QSRs now navigate a more fragmented sales landscape with evolving dine-in dynamics. Rising fuel and labor costs have further escalated delivery expenses, prompting brands to refine their logistics strategies. 

Winning Strategies for QSR Brands 

To thrive in this highly competitive and rapidly evolving environment, QSR brands must implement strategic initiatives that address both customer expectations and operational challenges.

Menu Engineering and Innovation: Balancing international flavors with regional specialties will be key to maintaining relevance. Value-driven menu strategies such as combo meals, customizable options, and limited-time promotions will boost engagement and encourage repeat business in an era where dine-in ADS is declining.

Differentiation through Experience: With over 400 players competing for market share, creating unique and memorable customer touchpoints is essential. From standout flavors and loyalty programs to immersive dining formats and tech-enhanced experiences, QSR brands must prioritize engagement and differentiation.

Direct Customer Engagement: To reduce dependence on aggregators and regain control over customer relationships, QSRs should invest in proprietary platforms, mobile apps, and direct ordering systems. Collaborating with networks like ONDC (Open Network for Digital Commerce) can also help brands expand their digital footprint while maintaining profitability.

Operational Efficiency and Cost Optimization: With rising input and logistics costs, efficiency is paramount. Brands must leverage predictive analytics for inventory management, optimize supply chains, and strengthen vendor relationships to minimize waste and inflationary pressures.

Expansion into Tier 2 and Tier 3 Cities: With smaller cities becoming high-growth zones, QSR brands must adapt to regional tastes, offer metro-quality experiences, and implement localized pricing strategies. This will be critical for long-term expansion and profitability.

Adapting to Evolve: The Indian QSR industry in 2025 is both an arena of opportunity and a battlefield of competition. Brands that succeed will be those that anticipate macro trends, adapt to evolving customer preferences, and overcome operational hurdles with agility and innovation.

In a landscape where customer expectations, competition, and costs are constantly shifting, the winners will be brands that seamlessly blend convenience, value, and experience—delivering not just food, but a compelling and memorable dining journey.

Restaurant India conference and awards has set a benchmark among restaurant fraternity for building a world class show on the business of restaurants in India. Restaurant India recently hosted first edition of ‘Tamil Nadu and Kerala’ inviting restaurateurs, chefs, policy makers, cloud kitchen brands from the region to attend the conference and awards that happened on 12th February at The Westin Chennai.

Driven by an appetite to try and experiment new cuisines, growth of experiential restaurant and globalisation, the food service industry in Chennai hold 4th position in India with a market size of Rs 15.6 thousand crores. In the organized segment, Quick Service Restaurants (QSR) lead with a substantial 38% market share, followed closely by Cloud Kitchens at 30%.

Here are top 4 key Trends that the market is witnessing: 

Multi-format/brand Restaurant is a Success: A city that’s known for its rich cultural and history, Chennai has given some of the top legacy chains to the country that are running into a multi-brand restaurant. “Indian restaurant is evolving and nobody today wants to run a single format restaurant rather experimenting their hand with multi-brand format catering to a larger crowd is successful,” shares Shriram Rajendran, Chef and CEO, The Table that runs multi-brand under a single central kitchen.

Leveraging Word of Mouth Marketing: Equipping customers with reasons to start talking should be the core mission of any restaurant and there’s no powerful marketing strategy than people talking about your brand. “Word of mouth and customer is the only way of marketing that we did over the years,” says Mani Ram Selvaraj, Fourth-Generation Entrepreneur, Ponram Biriyani Restaurant that’s into the business for almost five decades now.

It’s All About Experience: A restaurant is no longer known for its food today. Now that quality, value, sanitary, location, and staff are table stakes—requirements that every restaurant should meet for guests to consider it—the ability to deliver consistently engaging, memorable experiences that drive a connection to the brand at every touchpoint is more critical than ever. “We as a brand witnessed that people these days are looking for an experience rather than just food. Gone are the days when people just want to come, eat food and go. Brands that are able to crack the experience level of the customer are the brands that can sustain in the coming years. And, we want to focus on experience,” points Anand Krishnan, Director, Namma Veedu Vasanta Bhavan that has grown from a 60 seater restaurant to a 325 seater restaurant over the years.

Consistency is the Key: If you’ve been in the restaurant industry long, you’ve undoubtedly heard operators talk about the struggle to find and retain qualified chefs. That’s the first problem. And, to retain and maintain consistency is another. “It is about consistency, what you ate last time matters a lot as people are coming back to it,” mentioned Nikhil Nagpal, Chef Culinaire, Avartana, ITC Grand Chola.

The Quick Service Restaurant (QSR) industry in India has experienced phenomenal growth over the past decade, driven by rising disposable incomes, expansion of international QSR chains in the Indian market, deeper penetration of food delivery apps, and evolving consumer preferences.

With the Indian QSR market projected to reach $38.71 billion by 2029, growing at a CAGR of 8.74%, this sector presents massive opportunities for both established and emerging players. Increasing demand for convenience, affordability, and high-quality food options has made QSRs a preferred choice for today’s consumers.

As Indian consumers continue to embrace fast food, there is a growing preference for localized flavors, digital ordering, and quick delivery services, especially now with quick commerce platforms introducing cafes. The rise of food aggregators like Swiggy and Zomato has further accelerated industry expansion. However, the real game-changer in QSR growth has been franchising, allowing brands to scale rapidly while offering entrepreneurial opportunities to individuals.

Why and How Franchising is the Future of QSR Growth

Franchising has emerged as the most scalable and efficient growth model for QSR brands, enabling businesses to expand without requiring a hefty capital investment.

Low-Risk, High-Return Model: Franchising allows entrepreneurs to operate under an established brand, minimizing risks associated with independent food businesses.

Expanding Beyond Metros: Franchising is not just driving QSR expansion, but is also filling the critical gap in Tier 2, Tier 3, and even Tier 4 cities, where demand for organized fast food is rising but supply remains limited. As smaller cities develop stronger consumption patterns, franchising is enabling brands to bridge this gap efficiently, bringing high-quality, affordable QSR options to previously untapped markets.

Standardized Operations: Franchisees benefit from structured SOPs, marketing support, and supply chain efficiencies, ensuring consistent quality and service across locations.

Employment Generation: A thriving franchise ecosystem contributes to local employment and skill development, further strengthening India’s economy.

Challenges and Opportunities in the QSR Franchise Market

While franchising presents immense growth potential, it also comes with challenges:
Challenges:

●    Supply Chain Management: Ensuring consistency in taste and quality across multiple outlets.
●    Operational Standardization: Training franchisees to adhere to brand guidelines and service standards.
●    Real Estate Costs: Securing high-footfall locations at reasonable lease rates.
●    Rising Competition: Standing out amidst aggressive expansion by both domestic and international QSR brands.
Opportunities:
●    Digital Transformation: Tech-driven solutions for inventory, order tracking, and customer engagement.
●    Government Support for MSMEs: Potential incentives and policy support for first-time franchisees.
●    Localized Menus: Customizing offerings to cater to regional preferences and maximize customer loyalty.
●    Innovative Formats: Expansion into cloud kitchens and hybrid dine-in + takeaway models.

Future of QSR Franchising in India

The QSR franchise model is set to reshape the F&B industry, driven by:

1.    Tech-Enabled Growth: AI-driven demand forecasting and automated kitchens.
2.    Sustainable & Smart Operations: Energy-efficient store models to optimize operational costs.
3.    Greater Accessibility: Expansion into high-footfall areas like malls, highways, airports, and transit hubs.
4.    Government Policy Support: Possible tax benefits for first-time franchisees, encouraging entrepreneurship in smaller cities.

To recapitulate, the Indian QSR revolution is in full swing, and franchising is playing a pivotal role in driving this transformation. With a strong franchise model, a unique product offering, and strategic expansion, brands like Burger Singh are leading the way in making quality fast food accessible across the country. By embracing innovation, affordability, and scalability, QSR brands can unlock their full potential and contribute significantly to the country’s economic growth.

India has a huge population and they are more willing to try new foods around the world. Due to a number of market-driven and strategic factors, international burger franchisees are opening in India.

Young Gen-Z and millennials makes up an important segment of India's population, and they are greatly impacted by international culinary trends. Burger chains find this group to be an appealing market since they are more willing to try and embrace foreign cuisine. With less stringent laws and simpler standards for foreign direct investment (FDI) in the food and beverage industry, India has become a more business-friendly place.

It was projected that the Indian burger market would grow to 20.4 billion dollars by 2025. From 2022 to 2028, the fast food industry in India is anticipated to expand at a compound annual growth rate (CAGR) of 7.3%.

What’s pushing the growth

Quick-service restaurants (QSRs) are replacing traditional home-cooked meals in the Indian market, particularly in urban areas. Affordability, newness, and convenience are important in this business to be successful.

Also, International chains are also customising menu to suit Indian palates, depending on the region and geographies.
After partnering with Franchise India, Burgeratory and Wow Burger is all set to broaden their footprints by venturing in Indian markets.

Regarding the launch Tarun Sachdeva, Global Partner, Burgeratory said, “Our Brand ‘Burgertory’ is an Australian brand which has entered the Indian market and we plan to open 100 stores in India, with the first locations in major cities like Mumbai, New Delhi, and Bangalore.”

The brand is focusing on serving a menu that will feature a mix of Australian dishes and local adaptations, like the Tandoori Chicken Burger and Paneer Tikka Burger. Burgertory is committed to using local ingredients, while also importing some proprietary components from Australia. 

Health in focus

These days’ consumers are focused more on health-conscious diets and are looking at options that is both tasty and healthy.

Sachdeva added, “Our slogan is sinfully delicious healthy burgers. Everything we use is fresh in our kitchen.” 
Overall, they have 14 types of burgers and produce everything in-house and no frozen items. Similarly, there is a growth in the Plant-based burgers segment. By 2033, the market for plant-based burgers in India is anticipated to grow at $362 million.

Emphasizing on their plant-based burgers, Sunil Datwani, Managing Director, Wow Burger commented, “We are a Hong Kong based brand. We want to promote healthier way of eating. So, the main focus is to promote vegetarian burgers which are mostly soy-based. The patties are wheat based and no chemicals or preservatives used. The brand also serves rice bowls, wraps and much more.” 

Regarding the brand name, he added, “We will enter the Indian market with a different name as there is Wow Momos in India, so to avoid the confusion we will come up with a new name and logo. We are planning to launch 15 stores in India by end of 2025. For the start, the brand will open in Mumbai and Gujarat and later will expand to other locations. We also have decided to localize 65 percent of the menu as per the different cities in India.”

Although, the challenges will be there, but it is certain that the international brands are likely to grow in the Indian market with their unique concepts and creativity. 

Convenient food options like pizza is becoming more and more popular due to rapid urbanization and rising disposable income. To broaden their market reach and boost overall profitability, pizza chains are concentrating on aggressive marketing strategies, such as celebrity endorsements and social media platform ads. In order to appeal to the varied Indian palate and draw in more customers, pizza businesses are always changing their menus and adding regional flavors and ingredients. 

Over the last five years, India's pizza market has experienced remarkable expansion, with an annual growth rate of 26%. From 2024 to 2032, the market is anticipated to expand at a compound annual growth rate (CAGR) of 9.63%. 

Jae Won Lim, Founder & CEO, GOPIZZA Global in a keynote session at Indian Restaurant Congress that happened in Delhi on 8-9th October explained about their brand and the ‘Global Perceptions that Drive Growth’.
Here are the key insights from his informative session:

Running on Popularity

“We are a South-Korean pizza brand. When we started GOPIZZA in 2016, I wanted to make a true QSR version of pizza; our motive was smaller size, faster servicing speed and cheaper price. We made these happen in the last 8 years. Pizza is considered to be a premium food and family diner by the rest of the world. It usually takes long to deliver,” shared Lim who has witnessed a dramatic change for the brand, starting from streets to India and to the President’s office in Korea. “Anywhere people want pizza, we give them pizza. Currently, we operate in 7 different countries and 1200 stores and we are serving more than 600 thousand customers every month globally,” he added.

Service at the Top

To build a restaurant is an art. The nature of this business lacks scalability and hence we need to continuously focus and grow it. We serve personal size pizza mostly and the price in India starts from 89 rupees. We normally serve our customers within 5 to 7 minutes and that’s where we are trying to compete with our peers.

Globalisation is the Key

Emphasizing on why to be a global brand, he added, MCD’s is the largest Fnb Corporation in the world. And, it is still growing like a teenager and has become a global brand, targeting the right market, clientele at the right time.
Today, many Asian countries where the market is stagnant and not going anywhere so the brands try to get out of their nation to see potential in order to grow more. In India, lots of markets are drooling over. Even if we have enough capital to build the brand, maintaining the brand name is a challenge as you need to achieve scalability and consistency at the same time.

“Profitability also plays an important role. One may have 100 stores that make money but you can’t predict if that money will be from the first 100 stores or not,” he mentioned as he aims at making GOPIZZA a global chain.

Scalability is Important

Running a restaurant is a difficult task. “We were funded 40-50 million dollars. We are the most valuable food tech company in South Korea right now. In order to prove to our investors, we have to prove all of them that we are scalable,” he added as he is targeting to grow his outlets and is keen on expanding to newer regions.
He also mentioned that he worked at a Pizza chain to learn how the brand can be scalable, consistent and profitable. 

Infusing Tech for Efficiency

Elaborating further, he added, “Everyone has different skill sets in the restaurant, consistency can break and profitability isn’t guaranteed always.  In order to achieve things, we took in food technology and came up with the concept of pre-make the dough. And, this was our mission, serve the food faster with the pre-make dough. Within a year of practice and research in kitchen, we started our truck. Within the truck, we were selling 800 pizzas per night. It was a huge success pizza food truck model for us. There were 12 people working in the truck, especially if you see the oven it’s very difficult to operate with more people around. The brand aims to become MCD of pizza by building accessible pizzas worldwide.

Use of Automation

“We thought why not make an oven with automatic rotator which can rotate the pizza without any manual help. Food technology was very important for GOPIZZA from the very early days. The brand uses cutting-edge AI technology, including the patented GOVEN, which bakes six pizzas in 3 minutes. We incorporated AI in to our kitchen in 2019; this is called AI Smart Topping Table. The AI Smart Topping Table monitors pizza toppings in real-time for precise results. In Korea and Singapore and in other places, there are literally no humans to work in restaurants and robots are doing the work. We are dependent of technology as it is evolving. We made tremendous growth in India serving around 100 thousand customers per month. The brand has expansion plans in India and in other locations,” he concluded.
 

With the evolving consumer demands, the quick service restaurant (QSR) sector is going through a digital transformation. Drive-through technology, mobile ordering, contactless payment, data analytics and business intelligence, the impact of artificial intelligence, and many other strategies are some of the ways QSRs are adjusting to this change. Restaurants may retain their patrons and keep them satisfied by implementing customer loyalty programs. There are various points to look for in this segment. Here are the key points in this segment:

What’s Trending

“Every month and every day, we see a change in the trend. Now, the change in the trend, it's not happening because of what we are serving. It's because the customers are aware of what's happening across the globe. With today's technology, they know what is trending. What’s new fashion, and they want to get attached to those brands according to that,” shared Mahesh Reddy, CEO, GOPIZZA India.

Focusing on the digital era, Neelam Singh, Founder & CEO, The Burger Company said, “It is about survival, especially when it comes to traditional QSRs. More than 65% of population is under 35 years of age. They are more exposed to the technology. And it's all about following the trends and who is ahead and who is creating trends, which is going viral.”
It is also believed that the usage of technologies through our mobile phones, various apps, advent of AI is has all great impact on the segment and its customers. It is all about who is keeping up with the updated technology. And as QSRs, the brand also need to be available for their customers, because ultimately, they are the ones who are driving the whole business, giving brands the money to survive.

“So in this digital era, we have to respect their choice of convenience. Because when we see all the aggregators’ platforms, all they are doing is bringing convenience to the customers. And we as food brands, especially QSRs, we need to be available at all the touch points wherever they would like to find us, be it on aggregator apps, websites, or QR codes on the table. So it is not only about the delivery, it is also about how they want to place their order,” added Singh.

Building a Multi-Channel Strategy

Also, if we look at numbers and see, most of the successful chains and brands adopt multi-channel strategy to grow and expand. Customers today want their favourite brand to have both online as well as offline presence. 

“I think it is extremely prudent to have a multi-channel strategy now. QSRs and retail and dine-in were always a proven model. If we rewind 10 years from now, Cloud Kitchen was still starting up, and people had their doubts, how this Cloud Kitchen model would pan out. In those times, people would start for the sake of low rentals, or probably lesser compliance needs, etc. Today, Cloud Kitchens cannot be ignored. Therefore, we're already seeing a lot of QSRs moving into delivery more and more seriously. In fact, a lot of five-star hotels, etc. also have started their own dedicated, you know, delivery model,” added Varun Madan, CEO & Founder, Salad Days.

Commenting on the same, Reddy pointed, “Gopizza operates in different formats and models. And to scale 1000 outlets, which we want to do it in next two, three years, we can operate in 100 square feet, 500 square feet, 1000 square feet, 2000 square feet. Presently, we are there at all this square feet level dining outlets, or takeout outlets. Even a cloud kitchen, but which may not be there with the signage in the front of the customer with a less capex, because only the capex, not the interior cost will be there. So if I need to open 1000 outlets, of course, I will be getting into the cloud kitchen format. And I think to touch 100 outlets in next two months, 10 outlets are going to be cloud kitchen.”

It was in 2008 that the aroma of fresh donuts wafted into the Indian culinary scene as Mad Over Donuts made its grand debut. Today, this gourmet donut brand has not only taken India by storm, but has also redefined the nation's love for these delectable treats. MOD offers a diverse range of handmade donuts which are freshly-topped, 100% eggless and crafted to celebrate small joys and every day happiness. With its humble beginnings in Noida, Mad Over Donuts has swiftly risen to become one of the fastest-growing brands in the quick-service restaurant (QSR) industry, boasting a remarkable presence across India.

MOD currently has more than 150 stores across the country, in cities like Mumbai, Pune, Delhi, Bengaluru, Chennai and Ahmedabad. The brand has wisely nurtured its growth, focusing on profitability, product innovation, team building, and the seamless integration of online delivery systems. 

In an exclusive interview with Restaurant India, Tarak Bhattacharya,  Executive Director and CEO of Mad Over Donuts shares his insights on Kit-Kat collaboration of Mad Over Donuts (MOD), expansion plans and plans for venturing into healthy treats and much more.

Can you tell us more about MOD and Kitkat collaboration?

We have been planning this collaboration for past six months.  It took some time to get international approvals. We will be having more specific products on festive season in association with Kit Kat with different flavors. Kit Kat will have a permanent feature in the menu.

Recently, Mad Over Donuts innovated donut experience with Augmented Reality (AR) interactive game. Comment on the same.

You can actually make your own donut with your face; many people are using it for gamification specifically. It’s more like a brand engagement with the consumers. This feature is available in all our stores. It is a way forward for any brand.

What’s the biggest challenge faced by the QSRs?

The store operations, right location and right people are one of the biggest challenges in the industry today.

Who do see as your competitor? 

Competitors are healthy, it’s a niche category. We require more brands to explore in this category which will help in improving as well in terms of consumption.

Artificial sweeteners has been a trend these days. Do you add any artificial sweeteners in your items?

We use natural sweeteners and natural flavours.

Are you also exploring into healthy guilt-free treats?

Yes, we are still in the planning and developing phase. Healthy eating has been a trend these days so we will be venturing into that soon. It’s in the testing stage right now.

What’s your expansion plan?

We are expecting 50 more stores to open by end of this year. Currently, we have 150 stores all over India. Most of our stores are in Bangalore, Mumbai. We have 39 outlets in Bangalore as of now, and 40 outlets in Mumbai. We are expanding in other regions slowly.

As the scorching summer sun begins to relent across India, ushering in the much-awaited monsoon season, restaurants across the nation are gearing up for a revival unlike any other. Following a relentless heatwave that tested the resilience of both people and businesses alike, the imminent arrival of rain promises not just relief but a golden opportunity for eateries to reinvigorate their offerings. From cosy cafes to sprawling fine dining establishments, the anticipation of a monsoon bonanza is palpable as chefs and restaurateurs prepare to entice patrons with a delightful blend of seasonal flavours and comforting ambiance. This transition from sweltering heat to soothing showers marks not only a change in weather but also a pivotal moment for the culinary landscape, where innovation meets tradition in the quest to capture the essence of the monsoon season on every plate.

Nestled in the heart of Delhi, Flow Brew & Dine has not only weathered the scorching summer but is now poised to capitalise on the monsoon bonanza. "After the intense heatwave, we've seen a significant increase in footfall since the monsoon arrived," shares Swadeep Popli, owner at Flow Brew & Dine, reflecting the collective sigh of relief felt by both patrons and proprietors alike. With a strategic focus on enhancing the monsoon experience, the restaurant has curated a series of captivating events and activations throughout the season.

"Every Friday, we host an Open Air Latin Night to infuse the evenings with rhythm and energy," Popli elaborates. "Thursdays are dedicated to soothing Jazz sessions, while Saturdays come alive with Afro Night celebrations." These themed events not only cater to diverse tastes but also aim to lure customers back into the vibrant ambiance of dining out after months of being cooped up indoors.

A standout on Flow's calendar is the upcoming open-air pop-up fest slated for the 26th of this month, featuring the highly anticipated album launch of renowned band Kitnanu. This event promises to blend music, food, and community spirit under the monsoon sky, offering a unique opportunity for patrons to revel in the season's essence.

Anticipating a robust recovery in business, Flow Brew & Dine forecasts a substantial 30 percent increase in foot traffic compared to the subdued months of May and June. "The monsoon has brought a welcome change," Popli affirms. "People are eager to come out, enjoy our vibrant atmosphere, and participate in the festivities we've carefully planned."

In addition to vibrant events, Flow Brew & Dine has introduced enticing offers tailored for the season. "To complement the monsoon season, we've launched late-night happy hours on weekdays," Popli reveals. This initiative aims to create a relaxed and celebratory environment, enticing patrons to extend their evenings out.

Moreover, with the Euro Cup fever gripping the nation, Flow Brew & Dine has rolled out a special beer and food combo offer for match screenings on their expansive screens. "Our guests can enjoy our fresh craft beer paired with delicious food at a discounted rate during the matches," the owner explains. This initiative not only enhances the viewing experience but also adds value and excitement to the communal spirit of sports.

The Banyan Tree Cafe in Mumbai also has announced something special for the monsoon season. Chef Viraf Patel has curated a new menu that celebrates its roots and historical charm while embracing innovation. “The menu promises to bring the freshest local ingredients to your plate in the form of exquisite dishes. Some of the must-try delicacies include the Fluffy Cheese Omelet, Chili Butter Fried Eggs, Cauliflower Soup with truffle sour cream, Eggs Florentine, Lamb Meatballs in tomato sauce, and Seared Fish with lemon and caper butter,” Patel says.

Another monsoon destination for Pan-Asian flavours in Mumbai is Gauri Khan's opulent new restaurant, Torii. It has recently launched an exclusive monsoon menu featuring scrumptious delights. Keep an eye out for the Truffle Mushroom Ramen, Steamed rice roll, crispy mushroom/ prawn, Mushi gyoza and Norwegian salmon.

“In many parts of India, monsoon sales are the prime time for businesses to make profits! The same is for the restaurant businesses too. However, depending on the intensity of the rains, you may find an empty restaurant occasionally. Little footfall on a rainy day shouldn’t dishearten you; your customers still need you; you just have to reach their homes,” Chef Avinash Nayak from Mayra House stated.

Marketers suggest investing in social media marketing to inform customers about the monsoon plans. Social media has emerged as an unprecedented marketing tool for any business. Restaurants can share all about your special discounts, monsoon cleanliness efforts, updated menu, and upcoming events to appeal to customers.

 As restaurateurs strategize to maximise the monsoon momentum, many are leveraging the cooler climate to enhance the dining experience. The Green Terrace in Kolkata has transformed its outdoor seating area into a monsoon-themed sanctuary, complete with waterproof canopies and ambient lighting, creating a perfect setting for diners to enjoy the rain without getting drenched. “We have also introduced a Rainy Day Special menu that features spicy street food from different parts of India, which pairs beautifully with our variety of hot teas and coffees,” says proprietor Kunal Bose. This thoughtful adaptation not only attracts locals looking for a cosy place to unwind but also tourists eager to experience Kolkata's famed street food culture in a unique setting.

As the monsoon paints cities with its refreshing touch, restaurants across India are creatively adapting to enhance the dining experience. With innovative menus, thematic events, and cosy settings, they are turning the seasonal challenge into a celebration of gastronomy making a positive growth in their P&L sheet. 

India's Quick Service Restaurant (QSR) sector is poised to soar to USD 38.71 billion by 2029, driven by expansive growth nationwide. However, compliance has emerged as a pressing concern. TeamLease Services Limited stresses the urgency for industry players to promptly address compliance issues, given the potential legal, reputational, and operational risks associated with non-compliance. The Food Safety and Standards Authority of India (FSSAI) is actively promoting regulatory adherence through education and mandates, such as displaying food safety boards and employing trained supervisors. Yet, only 20% of the 2.5 million Food Business Operators (FBOs) in India possess an FSSAI license. To nurture a thriving QSR landscape, concerted efforts are required to enhance compliance through robust training, streamlined licensing processes, stringent quality control, innovative menus, and sustainability practices. Recent crackdowns on certain big brands highlight the urgency for the industry to reassess its operations amidst a growing economy.

TeamLease Services' released a whitepaper that identifies key vulnerabilities in the QSR sector, including:

Address Subpar Compensation: With 12% of the QSR workforce earning below the minimum wage threshold, QSRs must reassess their compensation policies to ensure compliance with statutory requirements and fair compensation levels, reducing attrition driven by dissatisfaction over pay.

Ensure Statutory Benefits Compliance: Concerning 21% of QSRs are non-compliant regarding minimum wage requirements, and 30% neglect to provide statutory bonuses. Ensuring adherence to statutory benefits not only fosters employee satisfaction but also mitigates legal risks, contributing to reduced attrition rates.

Prioritize Employee Well-being: Non-compliance with the Employee's State Insurance Corporation (ESIC) provision in 23% of QSRs jeopardizes employee health and reveals a disregard for regulatory obligations. Prioritizing employee well-being by adhering to such provisions is crucial for fostering a compliant and sustainable workforce.

Gratuity Provision Improvement: While 58% of QSR chains extend gratuity benefits to employees with 5-year tenures, the low proportion of eligible employees due to high attrition rates underscores the need for QSRs to review and possibly revise their gratuity policies to enhance retention and compliance.

Enhance Leave Policies: With 24% of surveyed QSRs not providing leaves beyond standard weekly offs, addressing leave policies is imperative. Offering adequate leave benefits can mitigate employee burnout, increase job satisfaction, and contribute to compliance with labor regulations, thereby reducing attrition rates.

Conclusion

In the rapidly expanding Indian food services market, Quick Service Restaurants (QSRs) must prioritize regulatory compliance to ensure smooth operations. From managing salaries and benefits to adhering to labor laws, compliance is essential for long-term success. By utilizing compliance platforms and partnering with experienced staffing firms, QSRs can enhance operational efficiency and minimize risks. Prioritizing compliance not only ensures a safer environment for both customers and employees but also contributes to the sustained growth and development of the QSR sector in India.
 

In a striking development, major fast-food chains in India are bracing for a tough quarterly earnings announcement. A recent Reuters analysis highlights how economic pressures are prompting consumers to tighten their belts, resulting in a significant revenue decline for these culinary giants. This shift comes after a year of aggressive expansion in 2023, which saw the opening of numerous new locations nationwide.

Notable companies like Jubilant Foodworks, Devyani International, and Sapphire Foods India, operators of renowned franchises such as Pizza Hut and KFC, have faced considerable challenges throughout the year. Their struggles have been exacerbated by escalating competition from global and local burger chains, including McDonald's and indigenous establishments. In an effort to draw in customers, Burger King introduced a budget-friendly 99-rupee combo meal featuring a burger, a beverage, and fries. Despite these initiatives, sales have not improved, as inflation continues to curb consumer spending.

The economic landscape remains daunting, with India's inflation rate consistently surpassing the government's target, straining household budgets and altering eating habits. Kranthi Bathini, an equity strategist at WealthMills Securities, observed a notable change in consumer behaviour, pointing out that visits to fast-food outlets have decreased from three or four times a month to just once or twice.

Financial predictions are equally bleak. Analysts from the London Stock Exchange Group anticipate a sharp decline in net income for the March quarter, with projections showing a reduction of 54 percent to 97 percent for key companies like Devyani and Sapphire, who manage Pizza Hut, and Westlife Foodworld, which oversees McDonald's franchises. Furthermore, a significant drop in same-store sales is expected, particularly for Pizza Hut, with a projected decrease of over 10 percent as reported by Reuters.

Despite these hurdles, franchisees are not halting their expansion. New locations have emerged in places ranging from the hill town of Kalimpong in West Bengal to the rural village of Shoolagiri in Tamil Nadu. This continued growth, fueled by the hope of capturing long-term market share, has yet to yield immediate financial gains and is compounded by intense competition from both international entities and flourishing local ventures.

Local restaurants like La Pino'z Pizza are intensifying the competitive landscape, and regional chains such as Jumboking and Biggies Burger are making significant inroads, fostering a highly competitive market scenario.

Adding to the competitive landscape, Pizza Wings, a fast-growing startup based in Rohtak, Haryana, has recently secured a significant investment, drawing $4 million from Zerodha co-founder Nikhil Kamath's venture capital fund, Gruhas. This financial boost is further supported by contributions from prominent angel investors, including Udaan co-founder Sujeet Kumar. Pizza Wings, which currently operates nearly 50 stores across Haryana, Delhi-NCR, and Goa, is positioning itself as a significant player in the region's fast-food market.

Westlife is poised to initiate the earnings season on May 8 in India, with other major players slated to follow. Despite the current downturn, there is a sense of optimism among analysts and industry insiders for a potential recovery in the second half of the fiscal year, spurred by anticipated reductions in living costs and enhanced consumer purchasing power.

Additionally, local brands are leveraging the current market dynamics. These entities are not only expanding through new franchise agreements but are also attracting substantial investments to support their growth. This dual approach of aggressive market expansion and financial fortification is positioning local operators as strong competitors in the quest for market dominance.

“As the fast-food sector in India navigates these turbulent waters, the upcoming months will be crucial in determining whether strategic expansions and investments can withstand the ongoing economic challenges and shifting consumer preferences,” Mihir Mehta, Restaurant investment advisor commented.

This turbulent period is underscored by a wider socio-economic impact that extends beyond the fast-food industry. The economic pressures affecting consumers are symptomatic of broader challenges within the Indian economy, including job insecurity and rising costs of living, which influence discretionary spending. As families prioritise essentials, dining out and convenience food become luxuries that many are increasingly unable to afford.

The ripple effects are evident in the operational strategies of fast-food chains. These companies are not only revising their menu prices but are also innovating with cheaper, localised menu options to attract price-sensitive consumers. For instance, some chains have introduced smaller, more affordable portions and combo meals specifically tailored to local tastes and budgets.

Moreover, digital engagement and online delivery platforms are playing a pivotal role in this new market dynamic. “With consumer footfall in physical stores waning, brands are intensively focusing on enhancing their digital presence and delivery services to capture the segment of consumers who prefer to order from the comfort of their homes. This shift towards digital has also spurred partnerships with delivery services like Swiggy and Zomato, which offer promotions and discounts that further incentivize consumers amidst financial constraints,” said Shamsher Singh, principal hospitality consultancy at Singh & Co.

As these strategies unfold, the fast-food industry in India is not only battling immediate financial pressures but also adapting to a rapidly changing consumer landscape. The coming quarters will not only test the resilience of these companies but also their ability to innovate and remain relevant in an increasingly competitive and economically sensitive market.

QSRs have been one of the fastest-growing segments of the restaurant industry in India and worldwide. According to a report by Researches and Markets, the QSR market in India was projected to grow at a compound annual growth rate (CAGR) of over 18% during 2021-2025. In 2023, the QSR industry in India witnessed a robust growth of around 30-35% in terms of revenue, driven by various factors such as:

1. Increasing urbanization, disposable income, and working population, which created a higher demand for convenient, affordable, and quality food options.

2. Rapid expansion of food delivery services, which enabled QSRs to reach more customers and increase their sales volume and frequency.

3. Changing consumer preferences and dining patterns, influenced by the ongoing pandemic, health awareness, and Western culinary influences. Customers preferred contactless and hygienic meal options, online ordering, delivery, and takeout over dining in at QSR locations.

4. Effective cost management strategies, such as optimizing menu pricing, reducing wastage, exploring cost-sharing opportunities, and leveraging new technologies, such as IoT and analytics, to improve operational efficiencies and profitability.

5. Aggressive store expansion plans, especially in Tier 2 and 3 cities, where QSRs faced less competition and more untapped potential. The QSR industry was estimated to add approximately 2,300 stores between FY2023 and FY2025, with an estimated capital expenditure of around Rs 5,800 crore.

Check More : 5 Trends to Watch Out in 2023 if You Own a Restaurant
 

Trends That Emerged in the QSR Industry in 2023

QSRs have also been adapting to the changing market dynamics and customer expectations by offering more variety, customization, and innovation in their menus, services, and formats. Some of the trends that emerged or gained popularity in the QSR industry in 2023 were:

1. Cloud kitchens, which are delivery-only kitchens that operate without a physical storefront or dine-in facility. Cloud kitchens allowed QSRs to reduce their operational costs, expand their reach, and experiment with different cuisines and concepts.

2. Healthy and sustainable food options, such as salads, wraps, bowls, vegan, organic, and locally sourced ingredients, which catered to health-conscious and environmentally aware customers.

3. Indian homegrown QSR brands, which offer authentic and regional flavors, such as biryanis, chaats, dosas, and parathas, and compete with the global QSR giants.

4. Co-branding and cross-selling, which involves partnering with other brands, such as beverage, snack, or dessert brands, to offer complementary products and services, and increase the average order value and customer loyalty.

Check More : Sustainability in Restaurants a Major Trend in 2023

Conclusion

The QSR industry in India has shown remarkable resilience and growth in the face of the challenges and uncertainties posed by the pandemic and the economic slowdown. QSRs have proven to be the future of the restaurant industry, as they offer a value proposition that appeals to the masses: fast, convenient, affordable, and quality food. With the continued support of technology, innovation, and customer-centricity, QSRs are expected to maintain their momentum and dominate the food service market in the coming years.

Next month, McDonald’s USA is conducting an operations test of the McPlant™, a delicious new plant-based burger, for a limited time in eight select restaurants across the U.S.

Here are five things to know about McPlant before the launch:

Innovating with flavours: “We’re always testing new items and flavors, and this particular test will help us understand how offering a burger with a plant-based patty impacts the kitchens in our restaurants,” shared the statement. The McPlant was created to give customers more delicious options in addition to the McDonald’s burger line-up you know and love, with fan favorites like the Big Mac® and Quarter Pounder® sandwich still available nationwide.

The juicy details: The McPlant includes a plant-based* patty co-developed with Beyond Meat® that’s exclusive to McDonald’s and made from plant-based ingredients like peas, rice and potatoes. The patty is served on a sesame seed bun with tomato, lettuce, pickles, onions, mayonnaise, ketchup, mustard and a slice of American cheese. It has the iconic taste of a McDonald’s burger, because it is one.

Availability: Eight McDonald’s restaurants across the U.S. will be testing the McPlant for a limited time starting Nov. 3 while supplies last. Cities with test locations include: Irving and Carrollton, Texas, Cedar Falls, Iowa, Jennings and Lake Charles, Louisiana and El Segundo and Manhattan Beach, California.

Going with the trend: If it sounds familiar. The McPlant has also been introduced in various markets overseas this year, including Sweden, Denmark, the Netherlands, Austria and most recently the U.K. Just like in the U.S., we often conduct limited-time offers with menu items internationally to help us learn.

Westlife Development Limited (BSE: 505533) (“WDL”), owner of Hardcastle Restaurants Pvt Ltd (“HRPL”), the Master Franchisee of McDonald’s restaurants in West and South India, announced unaudited financial results for the quarter ended September 30, 2020.

The results were taken on record by the Board of Directors at a meeting held on Nov, 6.

In the quarter under review, the company reported strong sales recovery led by its convenience channels that include delivery, take-out, drive-thru and on-the-go.

Sales through these convenience channels zoomed back to their pre-COVID levels in September, while in-store started showing healthy recovery trend as the Government started unlocking markets in a phased manner.

“I am happy to share that we have effectively steered this crisis and have got the business on a strong recovery track this quarter. Our strong financial foundation combined with a focus on accelerating our omni-channel strategy is reaping great results for us. We look forward to the opportunities that lie ahead and are motivated by the recovery in business that we have seen in this quarter. I am confident that we will soon be back on our growth path,” shared Amit Jatia, Vice-Chairman of Westlife Development Limited.

Also Read: McCafe to be present at every McDonald's India outlet by 2022

As a result, the company more than doubled its overall sales over Q1FY21, achieving close to 70% of pre-COVID levels. This was despite Maharashtra – the state that has close to 50% restaurants of the company - remaining shut for dine-in.

The company saw the pace of recovery across its operations accelerate, with recovery rate progressively increasing by 7-10% every month. Stores that were open for dine-in for more than five months came close to pre-COVID levels, with those that opened up recently recovering twice as fast.

Strategizing for growth

Westlife Development’s strategy for business revival has been focused on three key pillars of Assurance, Convenience and Access. With its ‘Golden Guarantee’ platform, it has made the McDonald’s experience as safe as possible for both its customers and employees. The company’s implementation of contactless operations, heightened sanitization across touch points and new hygiene protocols have helped build back customer confidence in a big way.

The company has also moved quickly to launch a bouquet of convenience services including contactless delivery, digitally-enabled contactless take-out and the innovative on-the-go service that has transformed all its restaurants into digital drive-thrus. These services have ensured that safe, hygienic and delicious McDonald’s food is available for customers whenever, wherever and however they want. 

May Interest: McDonald's- North, East partners with DotPe for contactless ordering

Another key lever of strategy has been Access. Identifying the need to offer great value to the customers, Westlife Development has been giving its customers compelling combos and offers through its McDonald’s and McDelivery app. This quarter, the company also tapped into key occasions such as World Chicken Day, Friendship Day and World Photography Day to enhance frequency and give customers more reasons to celebrate with McDonald’s.

With customer confidence slowly building back buoyed by festive cheer and opening up of dine-in services in Maharashtra, the company is confident of accelerating the pace of recovery and marching towards achieving and exceeding pre-COVID level revenues.

Kerrimo is the pioneer in the Philippines in franchising the food and drink in one cup concept i.e., the food and drink are put together in one carry-all cup so that the consumers can enjoy just carrying both in one hand. 

The fast-food brand Kerrimo was first introduced in 2007 but it was acquired by our company named Kerrimo Inc, in 2011, and we grew it from there, Armee M. Lanto, International Franchise Marketing Head of Kerrimo tells Restaurant India. In the Philippines, there are more than 100 stores, at present. Through FranGlobal, Kerrimo is looking to establish a good strong franchise network in India.

Venus Barak, CEO, FranGlobal mentions that a brand like Kerrimo will have a huge acceptance in India considering the small store format and easy-to-consume products which could be a great hit at cinemas, metro stations, railway stations, airports and local markets.

In an exclusive interview with Restaurant India, Armee M. Lanto, International Franchise Marketing Head of Kerrimo and Engr. Edmund T. Lanto, President and CEO of Kerrimo speak about the brand’s growth plans in India.

Indian Industry in the Fast Food Segment

The various food options in the market have led to a rise in the demand for newer and sustainable products. “The Indian market is open to international food choices now. India is very rich in its culinary history which we think we can infuse in our concept. We are very excited on how we are being introduced to the Indian food market,” says Armee M. Lanto, International Franchise Marketing Head of Kerrimo.

The Unique Combo Concept

Speaking on whether the unique combo concept will disrupt the fast food segment, Armee says, “Hopefully, in a good way.” “Our concept provides convenience along with the flexibility in serving the combos. Right now, Kerrimo offers french fries, sausages, nuggets but here we will serve items that are familiar to Indian palate - paneer, soya, and biryani,” adds Armee.

With Kerrimo, Armee and Engr Edmund are planning to open a new door of employment opportunities in India. Edmund T. Lanto, President and CEO of Kerrimo, says, “Keeping our core values intact, with our brand, we aim at providing employment, and business development opportunities in the Indian market.”

Expansion Plans in India

“We are starting off with major areas - Delhi-NCR, Mumbai, areas in Maharashtra and Bengaluru - as has been identified with FranGlobal,” says Armee.

She further adds, “We are very happy to see that many franchise applicants are excited to get associated with our brand. In the next five years, we are focusing on not less than 100 outlets pan India. We are very positive in that.”

Competition in the Indian Market

Armee tells Restaurant India that Kerrimo is the only player with such packaging in the industry segment in the country at present. “In terms of packaging, we are the only ones in India. But in terms of food, local fast food and snack joints, as well as bigger fast-food players, are our competitors,” says Armee.

Through its unique packaging, Kerrimo intends to create a new market segment in terms of the combo of food and drink. Armee says, “Indian market is familiar with the French fries and potato products but the way we present the food is something very unique and we hope that Indian market, especially the younger generation will appreciate it.”

The desire to eat healthily is growing and gaining popularity in India. Therefore, with Kerrimo, Armee and Edmund plan to keep the health quotient balanced in food. “Our R&D team is working on developing healthy food products. In drinks, we intend to serve organic and fresh options to cater to the specific market who demand healthier products,” informs Armee.

Franchise Strategy in India

“With the help of FranGlobal, we are looking at developing the area master franchise or area development partners. We have identified the key areas and are looking for the franchise partners for the same. We will put up our own store and recruit more franchisees to develop in that specific area.”

Franchise Selection Criteria

Apart from the basic franchise business experience, Armee says, “We are, specifically, looking for the individuals who have passion and dedication to develop the brand and move to a higher level. We are looking for someone who would take Kerrimo as their own and would put not only their resources but even themselves to the development of the brand.”

Franchise startup Investment

For the unit franchisee, the start-up investment will be between $20,000-25000, affirm Engr. Edmund and Armee.

Food Franchise and Restaurant Management company Yellow Tie that run brands like Genuine Broaster Chicken, Wrpachic, Just Falafel, Dhadhoom to name a few started it’s incubation centre in May 2018 & partnered with two brands – Umraan Regional & Wok This Way.

Started by Karan Tanna, Yellow Tie is partnering with brands that are unique and are scalable in its nature. For example;  Umraan Regional, a brand that brings together authentic regional recipes from different parts of India. The brand presence has grown by 500% in just 10 months of partnering with Yellow Tie. Similarly, Wok This Way, a healthy vegetarian oriental wok concept has grown exponentially in last 10 months in terms to scaling the business through franchising.

“We are also planning to add five more brands under Yellow Tie Hospitality’s incubation centre in 2019,” shared Tanna who look after certain criteria for taking up brands under their incubation centre.  “We focus if the brand has potential of being category leaders & have shown unit level economics,” he further added.

Expanding through Franchising

Umraan Regional launched its first franchise in Oshiwara, Mumbai and has four restaurants coming up in Nagpur, Sonipat, Bangalore & Ranchi. Meanwhile, Wok This Way is opening outlets at Oshiwara, Mumbai followed by outlets in Sonipat, Haryana & Kandivali, Mumbai.

“I am extremely happy to collaborate with Yellow Tie Hospitality as they understand the vision that I have for Umraan which is to take Indian regional food across the world. We are the first movers in Indian regional Food QSR and with this association we can penetrate market faster,” said Rahul Malik, Brand Owner of Umraan Regional.

The brand that runs over 50 restaurants under various category is also planning to add 60 more outlets of various restaurants brands that it operates. It is also eyeing locations such as Varanasi, Udaipur, Ludhiana, Chandigarh, Bhopal, Indore, Nagpur, Nashik and Kochi, among others.

“Wok This Way is India’s first healthy only vegetarian wok concept and we have received tremendous response in our first store. With Yellow Tie we are confident of putting Franchise systems in place and grow nationally and look at International markets by 2020,” added Anand Bhatia, Brand Owner of Wok This Way.

Tanna also acquired Bombay Blue last month from Everstone Capital. The company will also soon launch its new brand 'Yellow Food District' and is entering the food court management segment, especially in greenfield projects and in tier-II and tier-III cities.

“ We are launching the first exclusive Yellow Tie branded food court will in Sonipat in April,” added Tanna who focus a lot on brand building, software, raw material supply, menu engineering, training and marketing.

"Staying true to our vision of giving India’s first soft power restaurant chain and seeing the value we could add to two brands that we have incubated, we have decided to incubate more brands in coming year. We are looking for category leaders brands with proven unit level economics and promoted by passionate restauranteurs," he furhet shared by adding that being India’s first and only scalable restaurant incubator it puts a lot of responsibility on them to increase the rate of success of restaurant chains and make them sustainable. "We want to leverage our experience and infrastructure to make profitable and sustainable brands and there is no more satisfaction than supporting entrepreneurs who have achieved a profitable and differentiator concept," he shared.

It is apparent that changing trends in eating habits, shopping, entertainment and changing socio economic environment have brought phenomenal developments in food service industry in India. QSR is the front runner in this growth story. QSR industry has been growing exponentially in the recent years despite of some unexpected adverse factors. It’s market value in India is expected to rise to Rs 51,000 Cr by 2021.

With the ever increasing opportunities and propensity for customers to indulge for every rupee they intend to spend, and are experimenting a lot, which somewhere leaves little lesser room on affinity (read Brand Loyalty), this brings in a very basic question that, what makes customers to try out and also how to engage and bring them back for repurchase.  These question holds true to Food Retail as well. As one of the recent studies (ASSOCHAM-TechSci Research consulting joint study) states that India's food retail market is expected to touch USD 827 billion by 2023, up from USD 487 billion in 2017, growing at a compound annual growth rate (CAGR) of 9.23%, with recent reforms making the sector more competitive and market oriented.

Further,the aforementioned report hints at the macro aspect of share of India’s food retail sector being pegged at 29.56% for North, 27.19% for South, 25.39% for West and 17.86% for East, clearly indicating the geographical choice a given brand must consider while looking at these percentages.What clearly comes out of this study is the factor that choosing a location, becomes critically important. Rather there’s a lot of support infra that makes the food retail business sustainable.

Here’s the genesis of stepping into Indian Food Retail and the elements that bring forth the venture to become part of Food Plate of Indian consumer.

Understand the law & market practices: there’s a lot to understand on the variance when it comes to establishing the business in various markets within India.Keeping a tap on all necessary documentation - right from registration,having mandatory licenses, taxation system, labour laws etc. This is important to understand as it thus becomes clearer on the scope of engaging at various steps and suitably then involve the relevant stakeholders to address the next move.

Menu Selection:Menu is the core around which everythingelse revolves– right from the customers, to the suppliers, to partners, to various other stakeholders etc.  Culture, Religious Beliefs and Food Habits are predominant features which one can’t miss and hence they become an essential ingredient when it comes to introducing the cuisine in the Indian market. This leaves the scope of toying the idea of experimenting with various combinations, run a series of product tasting sessions with real customers, create a pool of early adopters, have FGDs (focus group discussions), fine tune the aspects that make the taste palatable.

Supply Chain:- It’s the backbone& Lifeline of entire operation. Negotiations at each step is essential, setting the quality benchmark in the beginning is equally important. It captures different spectra of the supply chain system that includes:

Choosing Suppliers: Having formalized the choice of food serving, next in line is choosing the right suppliers who follow similar practices, standardization and processes that mirror the core of your chain. The supplier essentially need to confirm the laws (necessary Licenses) and must have all mandatory certifications laid by the Govt. The plant must adhere to hygiene and must keep all checks and balances to maintain safety of food from possible infestation or decay.

Review Backward Integration:After addressing the menu and the suppliers, you have to review the ingredients that go into making the serving/ meal and seek the necessary understanding on the quality, cost of procurement, minimum guarantees, negotiations from farm to supplier, procurement from farm is also one critical element that is essential to see year-long supply of farm produce. Other ingredients also need close watch on the process that needs to be stitched for milk related, non-veg related food safety protocols.  This becomes critical as in food business, there are no exceptions on food going bad.

Cold Chain:It’s pivotal to have strong logistics in place, earmarked, real-time track-able to know where the supplies are and when is replenishment arriving. Besides that the maintenance of the supplies at optimum temperature is important to have that safe in transit and once it arrives at the destination, the supplies need to be kept at the right temperatures.

Location: (Converging Footfalls vs Creating/Generating Footfalls) - When it comes to establishing a restaurant, it’s critical to have a location that promises the proposed potential now and in near future.  One thing that needs to be kept on mind that the influx of footfalls(read Customers) is largely dependent upon the traffic that is crossing that location dovetailed with ease of access. Choosing a location is yet another element that needs a strategic approach, which in turn plays a role of a catalyst in accelerating the speed of ‘rate of return on investment’. This rate, shall hence vary in proportionsand one needs to do a strong research and background check. 

Further, store design, decor & careful selection of all the elements within the store add to the overall experience of the customers and hence shall need meticulous planning. One needs to keep the design templates that are adopted for replication as the expansion happens, this reflects unification of design and decor

Operations: Moments of Truth, begin here! - It’s the key to actually make the business run. It is sheer executional excellence that drives the strategy into real action on the floor. These are those moments when the customer expectations and overall experience take shape. Since, there are no second chances, so it’s important to have following aspects duly detailed out:

Maintaining Standardization: The protocol on handling each action point needs to be detailed out both internally and for external engagements. The documentation of these protocols makes it essential that if there’s any doubt, one can access and follow the framed protocols. Further, there is also a need to have Standard Operating Procedures laid out which are sacrosanct and become the basis of Quality of Servicethat the brand promises. Remember, the customers have their own yardstick to evaluate their experience and hence, standardization shall help the teams across multiple outlets to deliver same quality of both service and food at every engagement.

Meticulous Hiring &Training holds the Key:In food retail as of today there are estimated over 900 million human transactions happening every day, which means ‘900 million moments of truth’. To maintain similar experience each time, there is a consistent need to train each of the resources to bring parity on skills and ensure the same is maintained while disposing of one’s duty. Regular checks on the floor are important that captures any deviations and same needs to be shared and addressed by being reiteratedwith concerned team members.

Design Thinking:It’s vital to live the life of the customer and see/experience every moment to find gaps and make the corrective actions to set the benchmark of the services rendered for both human engagement & quality of food. This further entails to have continual feedback mechanism that bridges any possible improvisations

Marketing, Innovation & Research: These three are specialist profiles and need more focused involvement & very detailed discussion. On the broad-lines:

Choosing the right Positioning–how your food retail chain wants to be perceived as?

Branding – how do you want the brand to look like – the logo design, colour combination, what feelings the logo emotes etc., the protocol of using the logo – Creating the Black Book – the protocol of Brand usage

Pricing – having done the reverse calculation of each of the elements - cost of food, cost of operations, cost of location, evaluating competition with similar offerings, combos etc. the acceptable price that justifies rightful ticket size needs to be reviewed

Promotion- Choosing suitable platforms to make the essential visibility for the brand, its products, services etc.

Innovation – Adopting blue ocean strategy will keep the competition away for some time, and that could be kept on evolution which always remain as something more to offer, while improving on existing product offering.

I.T – The technologies driving QSRs are more evolutionary than revolutionary and all serve to improve the customer experience while increasing operational efficiencies. Voice ordering through multiple channels, Artificial intelligence, Mobile payments, personalization of reward points and Kiosks will definitely have capabilities of great impact. Having a right infrastructure at right cost in place to handle increasing bandwidth of web, aggregators, social media, data management needs are important to serve customer demands of Speed, Convenience and Value.

Introducing mystery shopper – the set of people who are well versed with your SoPs and protocols, they reach out to store and evaluate the store employees’ engagement at lean/rush hours, create a situation and observe how they handle the situation. They are a very interesting live review mechanism that help fine tune gaps that otherwise are left unplugged.

Research – this is one element that supersedes almost every aspect mentioned above. Primary, secondary, tertiary research coupled with lots of data mining on quantitative and qualitative research shall help in looking many aspects to zero in on possible options one can take forward. Thorough framework around research allows the team to take well informed decisions and help eliminate doubts that usually hold back.

Omni-presence – while store is a physical meeting point, the scope of looking at delivery, e-tailing and app based activities and being present at high footfall events further helps in building the scope for the restaurant’s acceptance in customer’s mind. The aspect that one needs to ensure that the service & quality are not compromised and if the conditions challenge any of these two, it’s judicious to keep distance.

About the Author:

Samir (SAM) Chopra with a career spanning more than 30 years has numerous successful entrepreneurial assignments under his belt.

In his journey as Entrepreneur, some of his accomplishments have been in bringing international chains to 

India. In 2009, Sam has bought the Master Franchise for RE/MAX in India. RE/MAX is an international brokerage company which has the expertise of successfully operating in 99+ countries across the globe.

As CybizCorp entered the Food and Beverage Domain, Sam has played a vital role in helping CybizCorp acquire the Master Franchise for California based burger chain Carl's Jr. under CKE Restaurants Holdings, Inc. that has a total of 3,522 franchised and company-operated restaurants in 30+ countries. 

Anurag Mehrotra, CEO of Charcoal Eats, co-founded the quick-service restaurant (QSR) brand along with Krishnakant Thakur (COO), Gautam Singh (CTO) and Mohammed Bhol (CPO) in April 2015 with a strong belief that 'good food can excite people'. The aim was to enhance the Indian palate by building a large and scalable restaurant brand in the country, thereby, providing great quality food at an affordable price.

Read on the exclusive interview of the Co-founder and CEO of Charcoal Eats, Anurag Mehrotra who tells it all – the journey of the QSR brand, key accomplishments and the expansion plans.

From Charcoal Biryani to Charcoal Eats – The Journey

I am a Commerce Graduate from the University of Allahabad and an MBA from Asian Institute of Management, Manilla. Prior to venturing into the entrepreneurial journey, I have held senior positions in large corporates like Kotak and Edelweiss. I have been a part of the startup domain for the past six years, and I, currently, serve as a Director on the boards of Coverfox, Capzest, Woodbox & Alien Adventure.

Charcoal Biryani, as it was originally called, started with six biryanis served through multiple cloud kitchens across Mumbai. In August 2017, we pivoted to a customer facing dine-in model with our first outlet in Pune. We also moved to a franchise model for these new outlets. To support this retail push, we started expanding our menu to offer an all-day meal and snacking options, and subsequently rebranded as Charcoal Eats in March 2018. Today, Charcoal Eats offers high quality, all-day food options across snack and meal times that include Biryanis, Starters, Rolls, Loaded Fries, Curries, Puff Pizzas, Beverages and Desserts. Customers can dine-in, takeaway or order for delivery, as per their convenience.

Key Accomplishments of Charcoal Eats in 2018

Charcoal Eats is currently present with 38 dine-in and express outlets across 12 cities - Mumbai, Navi Mumbai, Thane, Pune, Gurugram, Nashik, Chennai, Gandhinagar, Jamshedpur, Indore, Bengaluru and Jaipur. We have also set the groundwork for our international foray.

In terms of revenues, we have shown growth of almost three times from April 2018 to December 2018, with a revenue run rate of INR 17.5 mn for December 2018 v/s INR 6.0 million in April 2018. Our order numbers have shown a 350% growth from April 2018 to December 2018, with approx. 48,000 orders in December 2018, up from 13,600 orders in April 2018.

Also Read: Five Reasons Why QSR Is An Evergreen Business

This growth has been driven by two factors - our pivot from a ‘meals only’ to an ‘all-day dining’ menu and the increase in Charcoal Eats outlets across the country.

Our menu comprises a wide range of high-quality all-day dining and snacking options that offer adequate calories, at affordable prices. This delicious menu is now available to customers at their convenience – dine-in, takeaway or delivery. Customers can order delivery online through our website, mobile app or any of the leading food aggregation platforms, or they can simply call our customer care to place their delivery orders.

A key element of our growth story is the hassle-free, high ROI franchise model for people looking to start their food business. The company takes care of the food, supply chain, marketing, technology and customer care, while the franchisee focuses on managing outlet operations and local area marketing. Multiple outlet formats (dine-in, express, mini) allow us to open outlets suitable to a location’s specific requirement/ profile. All Charcoal Eats outlets are designed to be capital and resource efficient, enabling quick break-even and profitability at an outlet level.

Charcoal Eats follows a hybrid distribution model, with a mix of the franchise and company-owned outlets. This mix is currently at 50:50. Our franchise partners are motivated to associate with Charcoal Eats due to our obsessive focus on quality and customer delight.

The company proactively seeks customer feedback and has made many product/service improvements over the past couple of years based on these customer insights.

We have been recognised by Radio City, a leading pan India FM radio station, for Excellence in Food Retail, 2018.

Charcoal Eats’ Expansion Plans for the Next Two Years

"We are quite bullish on our growth both in terms of volumes and revenues across all our formats and locations."

We are increasing our presence in the metros and at the same time, we have started expanding to tier II cities. We are already present in Jaipur, Jamshedpur, Gandhinagar and Indore. We foresee substantial domestic growth coming from tier II cities and have ambitious plans to establish our presence in many more such cities by FY 2020.

Innovations at Charcoal Eats in the Upcoming Years

We will continue on our mission to bring consistently delicious Indian food to people across the country. Ensuring increased levels of consistency in taste and maintaining high quality will be our focus of innovation. Effective, environment-friendly packaging will be another area of innovation focus for us. Menu innovations will take the form of new products, flavours and new category introductions.

Optimizing Menu Boards to Increase Sales

Menu boards are cost-effective to keep customers up-to-date with pricing, products and promotions. They also help in faster service as customers make quick menu decisions. We use these to display real-time changes in the product pricing and availability to the consumers.

Our automated menu boards also allow us to promote daily specials and offers that help drives sales and contribute to increased profits.

Technology Innovations in the QSR Industry in Upcoming Years

We see the following areas where technology innovations will play an important role in the QSR industry in coming years:

- Personalised food recommendations to consumers, based on their past behaviour and preferences.

- Accurate demand prediction for efficient capital and supply chain management as well as waste reduction.

- Dynamic pricing based on demand-supply patterns.

- Enhanced multi-channel customer engagement to deepen the relationship.

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

Food Trends in 2019

Some key food trends in 2019 are:

- Emphasis likely to be on ethnic regional Indian cuisines.

- People are extremely health-conscious nowadays and so the focus would be on eating natural food, especially organic, non-processed and genetically modified food.

- Health and wellness will be the basis for preference for a larger number of consumers.

- QSRs will increasingly look at ways of making their food more wholesome and free of harmful additives in order to appeal to the growing number of health-conscious consumers.

- With eco-friendly and zero waste management becoming the focus of the food industry, sustainability is the core of how food will be approached.

- Alternative ingredients like goat milk or soya milk instead of cow milk will be preferred especially the ones that are at par in nutritional value.

- Innovative food packaging will replace traditional methods to meet the needs of environmentally conscious millennials.

- Snacks will be fancy and an important element of the daily routine.

- Preference for home-cooked food among the younger generation is increasing and this offers scope for food-tech companies to offer interesting meal kits for cooking a wide range of delicious wholesome meals at home.

Today the Restaurant sector in India is seeing some exciting times as India is now become top 25 markets in the world to start and build a Restaurant business as per a Technomic report. Today Indian Restaurant sector is witnessing diversity like never before with new trends, global cuisines adding new flavors on the table. Global Brands and Indian restaurants – new and old have boldly accepted it. But now time has come to look at the big picture. The winners in this dynamic environment will be the ones who can plan strategically for growth. While delivering a relevant and differentiated proposition to consumers will be critical, maintaining cost and operational efficiencies will be another key focus to raise big capital for elevating their business to next level.

“It is now time to build leadership in Restaurant sector as a precursor for this big growth to happen. Building Leadership is more than just communication, guidance and setting up a good example. One needs to build an organizational value system to take the business to the next level,” said Rajeev Varman, CEO Burger King India who shares some tips for brands to make successful business globally.

Make sure you Establish What you Have at Home: You have to learn very hard in the country and then excute the brand in global markets. Many a times restaurant owners are in a hurry to take the brand to the new geographies, that’s wrong. Learn from the mistakes of the others and make sure that you have a established concept at home.

Getting the Supply is Difficult: How do you supply the quality food that you can actually handpick in the restaurants around you to the other country where you have one or two restaurants. That’s always going to be a challenge and people need to think through that. Always work on your supply chain network beforehand. “We have our supply chain team ready with all necessity before we actually launched our first BK outlet at Select CityWalk Delhi,” shared Varman who has now expanded Burger King India to most of the cities.

Understanding the Culture: Every country or even every region has a different culture. What make sense in one country may not make sense in another country. You need to understand the cultural aspect and culturally market of the country.

It Need to be Economically Feasible: If it’s not working in India, the solution is not to go for Dubai but to figure out for India. When people see that the concept is not working in India they try to go to other country. It’s not true they need to figure this out and I always say this make sure your restaurant is performing well at the first store if you want to make the number count go on.

It’s All about Convenience: As you see tech industry has done a lot to bring convenience to customers whether it is paying through electronic means or accessing through these means. Technology is actually getting the restaurants closer to the consumer. So, the consumers can experience the brand in every different ways whether it is through delivery, coming in and ordering through kiosk and restaurants or  it is through aggregators. They have multiple ways they can opt for and it is all about convenience that they look for. “We are connected through our guests via all these methods,” added Varman.

McDonald’s India has posted its first profit during year-to-March 2018 amid a long-drawn legal dispute with one of its key licensee partners.

The global burger giant posted a net profit of Rs 65.2 lakh during FY17-18, compared with a net loss of Rs 305 crore a year ago, according to its latest filings with the Registrar of Companies.

McDonald’s India is operated by two partners in the country; Westlife Development by Jatia’s which is master franchisee for West and South and Connaught Plaza Restaurants (CPRL) that looks after North and East operations of the burger chain.

“The company has not only been able to stem any further erosion of its net worth, but has also been able to successfully reverse the trend of erosion through the infusion of fresh capital,” mentioned McDonald’s India in its latest regulatory filing. Total income which it earned mostly through royalty, grew 8% to Rs 119.6 crore.

During the year, the company allotted shares worth Rs 71 crore to the parent company and also increased authorised capital by Rs 50 crore to Rs 458 crore.

Last week the American burger chain has included the much loved Aloo Tikki burger on their international menu. McDonald’s Chicago is dishing out the humble potato cuttle burger by giving it a vegan tag abroad. This has clearly made a lot of customers happy as many are posting pictures of their vegan meal on Instagram.

The modified McAloo Tikki meal consists of a toasted bun filled with a veggie patty made with potatoes, pea and seasoning reminiscent of samosas. It is then topped with fresh red onions, tomato slices and eggless creamy tomato mayo.

“Customers have expressed interest in items from McDonald’s restaurants located in India and we’re excited to offer them the opportunity to try the longtime vegetarian favourite, McAloo Tikki,” said Nick Karavites, McDonald’s Operator in an official statement.

In the last 2-3 years eating out market has seen a continuous 10% annual growth with QSR segment capturing the bigger pie of the market. Growing urbanization, footfalls at malls where 10-20 per cent spaces are allotted to f&b brands has posted a high growth of these kinds of brands.

How Rolls Mania Became an Empire

Back in 2009, a young 18-year-old Puneet Kansal, came from Mathura to Pune with an empty pocket and the dream to set up a successful business. Possessing a meagre experience of odd sales jobs, he had zero knowledge of the F&B industry. His idea to bring back roti rolls he grew up eating and offering healthy rolls with a pinch of nostalgia. With an old school friend lending him Rs. 20,000, Puneet went on to set-up his table-sized kiosk outside a restaurant at Magarpatta city with just one chef to his help. Right from sourcing accounts to delivery, he did it all to make this venture a success. But success did not come easily to Puneet. With increasing numbers of customers each day, he was soon asked to vacate the place and that is how the first outlet of Rolls Mania was launched in the same complex.

During this period, Puneet found friends and partners in his regular patrons Gagan Sial and Sukhpreet Sial, who had already set their foot into the restaurant industry with 10 years of experience. Together, the trio formed Rolls Mania as an official company, opening the second outlet in 2010 and since then, have grown into a brand with 102+ outlets till date.

"We proudly say We just hit the century, the biggest milestone to date. We are successfully growing by 103 % per year,” says Puneet.

Striking the Right Balance

Striking the right balance between the goodness and wellness of homemade food packed in the form of succulent Kathi Rolls, Rolls mania got clicking the right taste buds of Puneites, igniting the need for more across the city. With a healthy and pocket-friendly array of veg and non-veg on-the-go rolls, it was the time Rolls Mania engaged with an expanded audience through expansion across diversified taste scenarios. After establishing six successful outlets, the team found the franchise model the most viable method to take the brand to newer and untapped markets across domestic boundaries, maintaining consistency and uniformity in terms of quality across all outlets.

Rolls Mania was one of the very few brands in the QSR domain to provide an entire support system to its franchise owners, enabling them with the right amount of skill and training. Ranging from trained kitchen staff to region-based marketing strategies and pricing, the brand not only expanded with this strategy but also founded a base of loyal customers and owners across the nation and fulfilled the dreams of many who aspire to own a restaurant.

Nine years into the industry, Rolls Mania is an entirely self-funded company, spread across 30+ metro, two and three-tier cities, with 102+ outlets and 90 per cent of the owners being women while selling over 12,000 rolls every single day.

Brand Ethics and The Three Qs

With humble beginnings, Puneet Kansal, Gagan Sial and Sukhpreet Sial founded today’s leading QSR brand - Rolls Mania. Initially, on occasions when delivery boys and employees didn’t turn up, the trio have delivered the food personally to sustain their base of happy customers. With such passion and zeal to make it big and no background of F&B industry or fancy business college degrees, the brand strongly believes that an opportunity is all one needs in life.

In a day and age where people opt for MBA graduates to do the job, along with top professionals, Rolls Mania also has employees that have progressed their way from desk boys to area managers today.

To stay at top of the game in maintaining standard operating procedures, the brand lives by the 3 Qs- Quality, Quantity & Quick service.

A motto of not only making profits for themselves but taking each and every member of the Rolls Mania family up the ladder of success and of growing together, they have created an army of employees and owners who have dedicated their lives to take the brand to newer heights. In a highly competitive QSR industry, here is a company that is setting benchmarks for other homegrown brands. 

Expansion Plan

A belief that rolls belong to no geographical boundary, the Kathi Roll brand visions establishing itself all over the world, kickstarting their dream with their first outlet in the United Arab Emirates, before touching other counties amidst the GCC.

Quick Facts

• Rolls Mania Franchise – The brand has 107 Outlets all over India with over 35 cities in which 11 outlets are company owned and 96 Outlets are Franchise Owned within a span of 8 years. 15 more stores are in pipeline, expected to start within this year.
• The investment required to start a Rolls Mania Franchise Outlet is up to 18-23 lakhs, depending upon the size of the store.
• Minimum Area required is about 200 sqft to 300 sqft (carpet). A store should be on the ground floor. It should be near to schools, colleges, residential areas, commercials & IT hubs. 
• Expected ROI – 1 year 5 months 
• Expected break-even – 1-4 months’ time period. 
• Preferred cities and location –  Pan India. Also, at all the potential airports with good footfall, at railway stations and all high-end malls in India.

Started in 2015, The Belgian Waffle has disrupted the waffle market in India in last three years. Started off with a small outlet in Mumbai at INOX cinema in 2015, today, the group is running 170+ stores across 40+ cities in India. The Belgian Waffles sells around 20,000+ waffles everyday and has also expanded its presence to neighbouring country Nepal.

“We’ve spent a lot of time getting our product and proprietary eggless batter right, which was really appreciated in terms of quality and consistency,” shares Shrey Aggarwal, Founder, The Belgian Waffle Co that has created a warm, fun and approachable brand identity that resonated with all ages from 8 to 80.

Franchise Network

“The largest QSR player in India is Dominos with ~1300 outlets. We currently have 170+ outlets so it is a long road ahead,” adds Aggarwal who believes that India itself promises to be a very fertile and interesting landscape for the brand and product.  

Further, although the brand is amongst the largest home grown QSR chains in India, they harbour aspiration of taking India to the world. “We have established our presence in Nepal and are actively looking at neighbouring countries. We have a product of global standards and this category is well received across international borders. With that in mind we are not aggressively looking at international expansion,” adds Aggarwal.

The brand is also looking at expanding into newer verticals which will help them in leveraging on their pan India brand presence. The idea is to delight the end consumers in categories where there are gaps. “We are also looking some interesting brand partnerships and alliances where we can capitalize on our product and process expertise coupled with the technology expertise of some players to come up with products which will delight the end consumer,” concludes Aggarwal.

FRANCHISE FACTS

Year of establishment: 2015

Year to start franchising: 2015

Total No. of stores:170

Investment required:Rs. 25 – 27 lacs

Area required (in sqft):200 – 300 sqft

Expected RoI:6 to 18 months

Preferred cities &location: Tier II, III cities

It all started with one cook, Colonel Harland Sanders, who created a finger lickin’ good recipe more than 75 years ago, with a list of secret herbs and spices scratched out on the back of his kitchen door. Today his formula for success is still followed in more than 20,000 restaurants in over 125 countries and territories around the world. KFC introduced its craveable chicken to India in 1995 and today has a presence across the country with more than 350 restaurants.

The quarter ending June marked the seventh consecutive quarter of positive System Sales Growth in the country for KFC. “We are currently 350+ restaurants strong and are confident of growing our presence further. Our vision going forward is to continue building on our strengths and delight consumers with the best experience – whether it is taste, service, quality or accessibility,” shared Samir Menon, MD, KFC India.

Franchise Network

The group is actively franchising since 2002, and has reorganized the KFC business under larger, well-capitalized franchisees in 2015 to further boost India growth and create significant value for all stakeholders. “We're in play with both equity and well-capitalized franchisees, and these are the twin engines that drive our growth,” added Menon who belives that their partners are experienced business entities with outstanding reputation to leverage the huge opportunity that India has to offer and, in the process, create significant value for all stakeholders. 

 FRANCHISE FACTS

• Year of establishment: 1995
• Year to start franchising: Actively since 2002
• Total No. of stores: 350+
• Break up of company-owned + franchise stores: NA
• Investment required: NA
• Area required (in sq ft): 2000
• Expected RoI: NA
• Expected break-even: NA
• Preferred cities & location: Metros and emerging cities

Started in 2004 with a single store in Kalyan, Mumbai, India, Goli Vada Pav sells authentic and hygienic Mumbai Vada pavs and is the largest chain of ethnic QSR with 300+ stores in 100 cities of 20 states in India.

“We as entrepreneurs are here to evolve this planet to the next level through products, services, imagination, exploration and innovation. It’s like larva becoming caterpillar and then becoming butterfly… the struggle will continue. But at the end you will have a beautiful butterfly”, said Venkatesh Iyer, Founder, Goli Vada Pav.

“We sell authentic and hygienic Mumbai vadapavs and we are the largest chain of ethnic QSR with 300+ stores in 100 cities of 20 states in India”, added Iyer.

Franchise Network           

Goli Vada Pav started franchising within a few months of their first store launch to drive deeper market penetration for the brand as they had dreamt of building a national chain of Vadapav. The benefits were New Income source, Operational empowerment, deeper market penetration, Risk reduction.

Goli Vada Pav has been on a fast track growth path Y-o-Y. 2017 was no different where we opened 50 new stores and expanded our presence in cities like Visakhapatnam, Rajahmundry, Vellore, etc. Over the next one year, we plan to open 100 more stores across locations like Hyderabad, Vizag, Chennai, Pune, Jaipur, Ahmedabad, Bhopal, and Indore.

“Our aim is to be to be the No. 1 ethnic fast food chain of quick service restaurants by retaining authentic Indian taste and maintain highest hygiene standards in food quality. We are on a mission to create more entrepreneurs and spread the spirit of entrepreneurship among young business enthusiasts”, added Iyer.

FRANCHISE FACTS

Year of establishment: 2004

Year to start franchising: 2004

Total No. of stores: 300

Break up of company-owned + franchise stores: 40 +260

Investment required: 10-12 Lacs

Area required: 200 Sqft

Expected break-even:6-8 months

Preferred cities & location: Across India

With quick returns and profitable business ideas, food franchising has always tempted great investments in India. And, today it contributes 28 per cent to Indian franchise industry ahead to world which is an average of 22 per cent of $3.95 trillion global market place of franchise industry.

Franchising these days is not limited to QSR and casual dining restaurants but fine dining spaces are also eyeing franchising as an option to expand their concept. In addition, today several leading global franchise companies, such as Dominos, McDonald's, Yum Brands, Baskin Robbins and Subway, have already established a presence in India. Franchise industry is expected to benefit greatly from government support across various sectors through various measures including foreign direct investments (FDI) in single multi-brand retail.

With restaurant franchising gaining momentum and finances coming from all corners of the globe, the industry can expect a hefty growth of industry in coming years.  According to a report by Francorp, “The Indian franchise industry is expected to grow 30 per cent on yearly basis. The figures of total franchising industry is believed to have reached $ 24bn and focused to touch the $ 35bn mark by 2020.”

Here are five main reasons why franchising is attractive to maximum people:  

Asset Light–A franchisee model is asset light and help brands focus more on the product and its quality. Hence, it is a good business to invest in.

Scalable – The model is highly scalable as brands are banking on expertise of product and process and letting the franchisee manage the store operations.

Local Area Knowledge - The key to success in the QSR business is to get the location right. For this local area expertise is of paramount importance and which is what the franchisee partner brings to the table

Focus on Product and Process – This model helps restaurants to channelize their energies on the core aspects of the QSR business - product development & process innovation. Consumer experiences revolve around the product and franchisee experience revolves more around the process.

Branding, Marketing and Distribution– Restaurants have taken cues from several global food brands and have studied their success and business model of expansion. They harbor similar global aspirations and hence want to channelize their energies on product development, branding, marketing and process innovation to rapidly scale in India and overseas.

Having established first Store in Chandni Chowk , Delhi , Bikanervala started spreading its wings and  gradually covered Delhi and NCR and their after other parts of the country and it did not stop but crossed the borders and penetrated into neighboring country Nepal to far of countries like USA, New Zealand, Dubai, and Singapore.

With one vision in mind, which resulted into a revolution of serving the humanity with great Indian Traditional taste and takes it across the Globe, Bikanervala is running 80 restaurants globally. While promoting India and Indian heritage, culture and cuisine, making it International class by innovations so as to satisfy the felt need of the entire world by serving good quality delicious and nutritious food.

Franchise Network
Bikanervala is currently running 15 franchise stores globally. “Reliability, Quality, consistency in flavor and economic are some of the important features of the products and products make a brand. This has been our secret to success in Brand BuildingHundred years of experience pooled and presented to the market with customer centric approach,” shares the spokesperson.

 

FRANCHISE FACTS

Year of establishment:1988

Year to start franchising : 1992

Total No. of stores: 80

Breakup of company-owned + franchise stores: 65+15

Investment required: Approx. 4-5 crores per store

Area required (in sq ft):10,000 sq ft.

Expected RoI: 10-12%

Expected break-even:0.5 Cr Sales PM

Preferred cities &location: India plus Overseas.

The food industry is a combination of many diverse businesses and it is responsible for feeding the world population. Every year, we are hit with different food-trends that change the way we eat; it's vague enough that people are eating bubble waffles, chocolate momos and tandoori pancakes. Now we also have restaurants trying fusion cuisines, everything that makes them different from other restaurants in the industry and also attract customers, only through the vagueness of the menu they have curated. 

When asked about the Indian restaurant scenario, Tiwana said,” They are ahead of many people’s expectation. Food Innovation and the design are pretty advanced in India. With all the different taste and the cultures of India, the explosion of food is remarkable in the country.”

What’s Cooking Up a Storm?

Indian food industry is poised for colossal brand growth and swelling its contribution to world food trade each year. The food segment in India has appeared as profitable and growth sector due to its considerable potential for value addition.

Tiwana said,” For us, it is rather important to understand the culture, food habits and the changing taste of the Indian customers. There is a lot of western influence in India, but the innovation in Indian Brands itself is learning for the rest of the world.”

The Key Essentials

To be in the Franchising business, you have to make sure you have the right partner, someone who really understands the Indian market”, said Tiwana who has just launched Millies Cookies in India, in partnership with WORLD ICONIC Brands (WIB) and Franchise India.

Stretching further, Tiwana said,” A great management team, who really understands the opportunities in terms of locations and is going to be behind the brand passionately, incurring huge profit, can be our partners in this business.”

How to scale this business to make it more profitable and also a sustainable one?

The food is the key but the dining experience has to be taken care of. You have to make sure that you understand customer’s requirement, how to deliver a great service. Talking of design, Tiwana said,” It is a crucial element that can be an eye catcher for the customers and they might just end up revisiting your restaurant.

The Perks of Franchising

Launching a new brand and then working to establish them could take much longer, but some Indian food chains like Subway and McDonald's have already taken the plunge. Also, starting and running a restaurant needs a lot of money.

Commenting on the same, Tiwana said,” There is a huge opportunity in the Indian market for franchising and currently we have just launched Millies Cookies, an iconic British brand, owned by SSP Group, a £2bn turnover business listed on the London Stock Exchange. We are already open with 2 brands in India, planning to extend our business through the franchising route.”

A franchise maybe at the top of the food chain, but starting one’s own chain of restaurant is a dream that many harbour. For someone who’s just entering the business, it’s a great idea to start with a reputed franchise, just to get an idea of how to work in the business. 

FOOD INDUSTRY is no doubt booming at a fast rate, giving due credits to the rising disposable income of the middle class. Speaking specifically about the Quick Service Restaurants (QSRs) like Pizza Hut, Burger King, McDonald’s, Burger Singh, etc that is growing exponentially in the recent times. According to a last year report by KPMG in association with FICCI on ‘India’s food service industry: Growth Recipe’, the food service industry in India can broadly be classified into four major segments, wherein Full-service Restaurants and Quick Service Restaurants (QSRs) together account for around 73 percent, rest 14.6 percent being street kiosk desks and remaining 12.5 percent being bars and cafes.

Two mega metros, Mumbai and Delhi NCR contribute to 22 percent of the overall Food Services market (11 percent each) followed by six mini metros comprising of 20 percent share in the Food Services market basis the FICCI report on Indian Food Services.“As more and more chains mushroom across multiple regions and franchising being seen as a viable option by a larger segment of the population, the QSR segment has seen considerable changes in the past one year,” says M. Yeshwanth Nag, Founder of The ThickShake Factory.

According to Nag, QSRs are what the modern Indian prefers, as life gets faster and time more precious, consumers need their product created and supplied faster with articulate presentation and perfect taste. “We can see QSRs moving to tier 2 or tier 3 cities more and more in the next few months as more and more players realise the potential for these areas,” he adds.

Urbanisation,youth spending, nuclear families and improved logistics can be a major catalyst to penetrate QSR segment in various parts of India. Also, about 50 percent of India’s population tends to eat out frequently which brings India to a very close proximity to developed QSR spaces across the globe.  “Technology will surely play a major role and will be able to cater to different customer segments and help in knowing their taste and preferences. The CRM will be more well defined and will help us tapping new customers along with allowing us to bring back our old customers by giving lucrative discounts and promotions as well,” feels Nitika Kapur, CEO of Nukkadwala about the future potentials in QSR segment.

One of a very interesting trend in QSR segment noticed by Kapur is the shift of serving Indian authentic regional delicacies drifting away from serving western cuisine. The need for the hour is for the suppliers and QSRs to innovate together. To make the business models work, a good balance between the right prices, acceptable transactions on a weekly basis and most importantly ensuring a right supply chain is crucial.

Seeing the potential in Indian market, the traffic to enter the Indian market has increased. "The QSR segment is one of the most exciting segments in the F&B industry today. People are opting for quick, casual and value for money meals and QSRs offer exactly that. For our Japanese QSR we have experienced over 200 percent growth in the last two years,” said Hakuei Kosato the founder and Managing Director of Sushi and More India Pvt Ltd. The company announced their plans to open more Sushi kitchens and also launched their new QSR brand “The Don” in Mumbai recently.With the big brands building up, the small brands are also expected to rocket their operations and sales in the next few years to provide their share in the growth spectrum of the whole QSR segment.

Ashok Sharma, a former franchisee partner of Yum! India has filed a case of extortion, cheating, criminal intimidation and conspiracy against senior officials of Yum! India, including global CEO of Yum! Brands, Greg Creed and private equity firm Samara Capital Partners Fund II.

The former franchisee in an FIR filed in Uttam Nagar police station of West Delhi area mentioned that he was coerced to sell his business run by AN Traders Pvt Ltd (ANTPL) at a throwaway price to Samara Capital in 2015. 

“The accused persons, in collusion with each other, committed extortion and cheating on me and other directors of ANTPL by inducing/forcing us to deliver the entire business, which was valued for more than Rs 208 crore, at a meager sum of Rs 95 crore,” Sharma claims in his FIR. Sharma’s ANTPL was granted franchisee for KFC in September 2005 and had outlets in Punjab, Delhi, and Uttar Pradesh. 

A case has been registered under sections 384, 420, 506, 379 and 34 of the Indian Penal Code. However, Yum India has denied all the allegations citing it meaningless.

Yum! strongly condemns the baseless allegations made by ANTPL, a former franchise partner with whom we ended our relationship after it defaulted on payments to Yum!, vendors, real estate owners, employees,  and towards its statutory liabilities,” a Yum! India spokesperson said in an email response to Forbes India. 

Among the accused mentioned in FIR are Niren Chaudhary, former president of Yum India who now leads Krispy Kreme business in the US; Ankush Tuli, former CFO of Yum!; Gaurav Tewari, head department Yum India; Nagesh Shetty, former director franchisee Affairs Yum!; Rajesh Shetty, director supply chain Yum India; Sajan Thomas, former general manager of AN Traders Pvt Ltd; Sumeet Narang, founder of Samara Capital and director of Sapphire Foods India and Samara Capital Partners Fund II. 

According to the sequence of events narrated by Sharma in the FIR, it all started way back in January 2013, when Niren Chaudhary allegedly asked for 20 percent share in the profit of ANTPL. The company had posted a profit of Rs 7 crore in 2013. “Niren Chaudhary told me that since the entire businesses of Yum in India is managed by its top executives based in India, the share demanded would be distributed among accused 1, 2, 3 and 6 (Niren Chaudhary, Ankush Tuli, Gaurav Tewari and Greg Creed),” Sharma alleges in his report. On being denied the share, Chaudhary allegedly threatened Sharma of ruining the business of ANTPL. 
 
Though, call and messages sent to Sharma by the media remain unanswered.
 
Yum! Brands is successfully running KFC, Pizza Hut, and Taco Bell in India for more than two decades now and own over 45,000 restaurants in more than 135 countries. And, has two franchisees in the country; Ravi Jaipuria-owned Devyani International and Sapphire Foods India, which was formed by a consortium of funds led by Samara Capital. Samara bought part of Yum! Brands’ franchise business in India in 2016. 

In last few years India has seen an upsurge in the young and dynamic diners who are more experiential and spontaneous in nature.  Being one of the youngest countries in the world where one-third of the population is young and energetic there is so much for the restaurant owners to lure these customers into their restaurants. According to a report by ConsumerLab, India has around 200 million children under the age of 18, and 69 million of them reside in urban areas. Born and brought up in a very urban landscape this generation has a very different childhood to the one their parents experienced.  And, surprisingly 40 percent of these people regularly dine out at expensive and popular restaurants.

It doesn’t end here, these generations not only have the daunting number but also they have become one of the largest consumer base contributing to the dining scenario. Born with the digital influence, Gen Z is expected to challenge even the savviest restaurant marketer.

Endless to say, they are much more than the tradition, they know their own means of entertainment and Smartphone is their next complete world. Here are four best tactics that work when marketing your brand to this go-to generation.

Make your Brand Social:  There is no doubt that this generation is a born marketer and are born in the smart age and hence they are very choosy about brands and ‘lack brand loyalty’. To pursue them you need to make your brand popular on social media. Post recipes, photos, and offers that lure them to your restaurant’s Instagram, Facebook, and Twitter page to get a follower in them.

Always be Impromptu: Always available online, this generation knows what quickness means. They are a call or a text away from their peers. A restaurant has to respond to their queries and questions in a timely manner...else you have lost your customer as they are very frisky about their choice. One day they might eat at a sandwich place and the other day they would look for a nice coffee shop or a wine bar.

Break the Monotony: Like their parents and siblings who were born before 1996, they are no more attracted towards traditional and old age medium of communication. This generation can’t imagine a life without a smartphone. Hence, a restaurant has to come with different ways to market their young customers’ wherein they may launch a certain app and ordering platforms to get at their fingertips.

Do it Instant:  They are one of those impulsive buyers who like to do it within a flash of seconds. Focused and always in hurry, these fellow loves quick, on-the-go and snack-sized bites.

Quick service restaurants (QSR) are expanding at a rate never seen previously and are expected to go on with more success rate. According to a recent survey, the restaurant industry is expected to grow at a CAGR of 10% by 2022.

QSR is in high demand because of their fast and variant service provided to the customers. What really attracts the customers towards this industry is that QSR instantly stands upon their expectations satisfying their hunger with their instant food products. This is one of the prime factors because of which customers are likely to prefer QSR over other dining options.

The presence of brands like McDonalds, Pizza Hut, KFC etc are showing that there are immense opportunities for QSR in our Indian market. Being low in price and quick in service, this segment of the industry is providing foodies with great quality food in quick time-saving time and money both at the same time.  “QSR is a great success as they offer food that has been pre-made. It only requires the last minute preparation before presenting it before the customer,” says Rakshita Srivastava of The Saffron Boutique.

But the things are not as easy as it looks when establishing a quick service restaurant. With an increased demand in this chain followed by food quality, rise in prices of the ingredients, competitions from the local as well as international market, things are not the same anymore. With these challenges, running a QSR is now one of the demanding jobs recently in the market.

“Almost 50% of the chains which have opened in the last year are now closed or are facing extreme crisis condition from the market. Keeping few basic things in mind, one can attain success in this particular field,” says Nitish Bansal, owner of 736 AD.

Maintaining the quality  

With the industry experimenting with their products a lot these days, somewhere or the other, their main concern has shifted from the quality of the food towards other things like ambiance, service etc. But the owners should not forget that what can sustain them in the market is the quality of food they provide. At the end what matters to the customers is the food they get. If it’s filling their bellies, then you have a great chance in sustaining at the market. In short, everything can come and go, but what will eventually bring customers to your venture is the food you provide.

Choosing the location

Having the right location for your outlet plays an important role in creating the impact in the market. It is very essential to have your outlet at a location which is heavily populated. It increases the chance for your venture to establish in an early time with achieving great footfalls.

Setting up the interior

Along with the quality of your food, the interior of your venture also matters a lot. The place should be designed keeping the customers in mind. People usually prefer to dine out in a place which can provide them with calm and relaxing ambiance while they are eating. Proper kitchen and dining area should be designed so that the place doesn’t looks clumsy. Using the space provided is something which is always a key thing while running a venture. Proper use will eventually make your place look wonderful, inviting people to come and enjoy your food.

Hiring employees

One of the important things in this business are the employees who are looking after your company. While food being an important factor for grabbing customer’s, employees behavior too play an important role in maintaining the sales and value of your brand. Training of your employees is a necessity as they will be your manpower in the upcoming time. A customer usually leaves with a great experience and smile if they are treated well while getting served.

Expansion of your QSR  

Once your venture has gained success, the next thing which should be in your mind is the expansion of your brand. More number of outlets will eventually help you grab the market followed by your brand awareness which will create customers for you. A good demographic research is required before expanding your venture. With a vast kind of people living in different kind of places, you can play with your menu which can create interest and desire in them. Hence the location and the native population should be a prime element while expanding your brand.

With busy lifestyle, people are now looking for a quick option which can remove their hunger with quality food. The price and the timing is also something which grabs their attention saving money and time both at the same time. Hence QSR provides you with a great opportunity to enter into the business. Considering the above-mentioned points, one can surely find path towards the success of your brand fulfilling the need of their customers.

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Nabi Naseeb had always loved Döners and Gyros during his international trips. It was during one of his many trips when he realized that he loved the food so much that he wanted to bring them to Dubai. After thorough research, he opened the QSR chain in 2014 with the first outlet in Dubai. By bringing these wonderful concepts together which are inspired from Chicago and Berlin, the group has marked its international presence in many countries and is now set to open its outlets in India soon. Excerpts from the interview:

How did it all begin? What made you enter into the food business?

We started the food business because of our love for food. It is a kind of passion as well as love for our family. I travelled a lot between Dubai and Toronto. Instead of taking the direct flight, I always used to go via Frankfurt with a 4-5 hours layover just so I can go from the airport to downtown, have a döner, come back and then head to Toronto on the next flight. It’s just my love for döner which made me do so. The same thing happens when I had to travel to New York. I used to travel to Chicago first via transit and then to New York. This is how much we love food in our family.

How do you differentiate between shawarma and döner as the product is somewhat similar?

Döner and shawarma are completely different products. The meat recipe, taste and texture of döner meat is different from shawarma meat. Even the quality of meat and the saucesare different. Döner is more of a Mediterranean European cuisine.

How are you trying to keep your ingredients fresh?

Absolutely everything is fresh here. Our meat comes from Germany where as the sauces, veggies and breads are locally sourced to ensure freshness in every bite.

Why Dubai as your first location?

We started from Dubai because it was always the first name that struck our minds. Many new concepts are being introduced here not only because of the vibrant tourism but also because of the undying curiosity of the people that call this city home. In addition, Dubai has a diverse audience and has become an important part of the globe in recent time. We also have our locations in Saudi Arabia and London and are expanding to Oman, Los Angeles and Toronto very soon.

What was the whole idea of entering the Indian market?

We are very excited about the Indian market. We have seen the potential. With today’s generation, who is also engaged in new ideas and products. We believe that the idea of bringing our concept here to India will eventually favor us. With the right team and partners, we will be opening our outlets here very soon in the upcoming months. We have the right tools, team and product for this market, which will be in our favor to help serve the people of India with something different.

What will be the number of outlets and cities you are thinking to expand to?    

We are looking forward towards opening 150-200 locations within India in the next five years. The group has partnered with FranGlobal as a master franchise partner which will be bringing in the bandwidth and the infrastructure. The group is planning to expand via Development agents across fifteen to eighteen clusters in India who would be working in those regions into the tune of every cluster giving 15-20 outlets to each DA.

Will you be looking at someone who is already into the food business?

Ideally yes, because they have a team that are already experienced. Having such a team will help us in establishing and knowing the details about the native market where we are heading. However, when it’s about the development element, we are open to people who are curious and ready to invest in F&B business if they come with a right amount of financial, operational and marketing capacity. It will be a mix of people willing to invest in food business.

What would be your strategy to compete with the QSR market already there in India?

I don’t think that there is any brand that can compete with us. There is no competition because you don’t have anything close to döner and we are going to serve a completely different product to this country. So, I don’t think that there is any kind of challenge for us right now in the Indian market. More than challenges, I feel that there is a lot of gap in serving the fresh quality of food products, good costing, hygiene and great taste. We want a brand which is affordable having great product which is freshly made. 

Who will be your target audience?

Young generations between the age of 18-35 are the target audience for us. We also want to target people who want to eat better quality of food.

Where will you get the raw materials from? Will you be customizing your product?

India is a local produce driven market. We would have to source ingredients from there as much as possible. I think India has that capability to source all of our needs.

Also, we will be customizing our products to the locals. The sauces and product will be customized in such a manner that is loved and respected by Indian culture.

What will be your global strategy that you will use for Indian market?

With India being the largest market for the brand, the vision we have for establishing our venture will be one of the biggest QSR chains India will have in the coming years, at least in the region. Our teams are going to get trained under their guidance and management. The overall idea is that the brand should look and feel similar to the Dubai outlet. The product might taste a bit different but the brand and the core experience is the same, which should remain uniform across all the branches.

Where can we see your first outlet getting launched?

We are planning to open the first outlet within the next 4-5 months, ideally in a shopping mall. We will be launching our brand all over India. We ideally want our establishment in Delhi, Mumbai, Bengaluru and Hyderabad, but Delhi and Mumbai will be our first preference.

Waffles are no more a sweet breakfast delight that we have savoured for years. It has become a whole lot meal option with varieties of options and tastes available in the market. Globally, the chicken and waffle mafia is capturing the bar menu, restaurants space, food trucks and even new age waffle bars that are innovating with this old age Belgian product. “As per our studies in the market we find that after eating burgers and pizza for last 20 years in QSR format, the customer is looking for new food options and Waffle has emerged front runner in trending new food option,” shares Rajeev Chawla -Executive Partner Wafl which recently opened its first outlet in India.

Several restaurants in cities like Mumbai, Bengaluru and Delhi are going beyond just classic waffles and creating innovative and healthy waffle options for an all-day menu option. “Waffles were always there, it's just that it had never been explored until now. I have spent most of my childhood eating ice cream waffle cones. It's just that I didn't know what an actual waffle was until I ate one in the west,” adds Saurabh Rathore, Founder & CEO of London Bubble Co.

Waffle has existed in India for years. It's just that the availability of it was limited because people have always though it as a premium product that was only catered to a particular type of customers and audience. Also, such kind of products was only accessible at the cafes and lounges at 5 Star hotels making it less accessible as a product for the masses. Hence, the main duty that these players are playing is to create awareness in the market. “The three key things that we focused on to overcome this challenge was to educate the masses on bubble waffles, pocket waffles, bubble shakes etc, to measure the same timely, and to ensure acceptability,”  Rathore adds further.

Not Limited to Breakfast:

India as a country has always lacked access to the authentic western desserts. Thus, with global trend picking up, people travelling west more frequent, these trends are much more acceptable these days. People have started accepting and embracing different cuisines and these foods are no more restricted to breakfast options. “Also, let's not forget that patterns are changing with foods. People want an easy to carry quick bites and Waffles undoubtedly fits the picture. Waffles are easy on the pocket, low on the calories compared to the traditional desserts and are super portable. I am sure no one minds a bite,” adds Chawla.

Breakfast market seems to be prospective, but restaurant these days are coming up with various menus– sweet and savoury, healthy enough for all-day long food choices. Hence, we can say that waffles could be the next big trend in the market.

In today’s world, everyone is struggling to save some time even when stopping by to have a bite to eat. People have always shown an interest towards eating at a Quick Service Restaurant. Looking at the opportunity in the Indian economy, food chains from many countries have set up operations in the country, majorly focusing on metro cities. Resulting in what? Cannibalization, that is eating each-others market share as many of these brands have similar product offering like pizzas, burgers. All these brands are trying to attract the same audience, who are likely to get bored of eating the same food over and over again.

There are a few successful players in each category as McDonald’s, Burger King in the burger segment, Domino’s and Pizza Hut in pizza and Subway in salads & sandwiches. Apart from these few success stories all the other brands offering similar food options are struggling to gain some market share from the market leaders, much to their failure. Also many outlets of successful brands are closing down. The reasons are unthoughtful expansion in the same places, high cost of real estate rentals, along with increased options to eat from, thanks to food-tech startups like Zomato, Swiggy etc.

But there is no wonder more and more businesses are setting up in the QSR space looking at the CAGR of 22 percent over the next 5 years, reaching Rs. 24,665 crore in 2021 from Rs. 9125 crore in 2016.

Investment in Indian QSR

Multiple investments have happened in this segment in the recent past; a few prominent ones are listed here. Wow! Momo, a QSR chain based in Kolkata raised funding of Rs. 7.9 crore from Bandhan Bank in July 2016. Again, this year the brand received Rs. 44 crore in a series B funding round led by Lighthouse Funds. The company was valued at Rs. 230 crore thereafter. Another quick food-delivering app based company Faasos have received total equity funding of $60.4, the latest one was the Series C funding worth $6.4 million from Sequoia and Lightbox.

QSRs serving Indian delicacies are being invested into, as Gurgaon bases Biryani Blues raised Series A from Carpediem Capital, a private equity fund, the amount remained undisclosed. Another similar venture, Charcoal Biryani raised seed funding in February 2016 amounting to $150,000 from Lion Ventures and Coverfox.

Another segment is of multi cuisine quick restaurants, Box8 a Mumbai based kitchen, which prepares and delivers Indian meals along with salads, sandwiches etc. has received Rs. 50 crore in a Series B funding from IIFL seed ventures fund and Mayfield. Food startup 48East serving gourmet Asian food at a decent price received a Pre-Series A funding from a family from UAE, Al Dhaheri. The Bangalore based startup serves delicacies from 48 different Asian countries in their weekly changing menu. Yet another fast Indian food chain Hello Curry raised $ 2 million in two funding rounds venture and seed from Sashi Reddy and SRI International.

Looking at the opportunity in the segment Vatika Group plans to invest Rs. 100 Crore in setting up an Indian street food serving chain Nukkadwala, “Inspired by a billion foodies” as they say.

Acquisitions

Many acquisitions were alone seen in the recent year within the segment which are worth the attention, Hello Curry in April 2016 acquired The First Meal, an online breakfast and health foods subscription platform based out of Hyderabad, in a cash-and-stock deal. An year before the firm had acquired another online food ordering and delivery service Paratha Post in a similar deal, the amount for both the deals was undisclosed.

Dosa Place by Adhya Restaurant, a Hyderabadi startup acquired another Hyderabad based food Company ‘ChennaiChef’ for an undisclosed sum last year.

Even in the international markets, people are developing a taste for Indian food, Curry Up Now having operations in San Mateo, Palo Alto, San Francisco, San Jose and Oakland etc. has acquired the fast-casual Indian chain, Tava Kitchen. This was a strategic move to expand faster while providing an authentic Indian food variety to the customers.

Conclusion

The QSR space is not just about having a big brand name and supplying standard food but it is more about coming up with a unique idea and delivering a complete customer experience in terms of ambience, food variety and quality, value of money and service. People are looking for newer cuisines, varied taste and overall experience when dining out and investor can leverage on the same.

Established in 2004, Goli Vadapav is one of the largest ethnic chains of vadapav in India. 

The group started signing franchising within a few months of opening their first store launch to drive deeper market penetration for the brand. “We had dreamt of building a national chain of vadapav,” shares Venkatesh Iyer, Founder & CEO adding that new income source, operational benefit, deeper market penetration and risk reduction attracted him towards franchising. 

Franchise Network

Goli Vadapav is currently having over 250 franchisees running close to 300 stores of the brand pan India. “To be no. 1 ethnic fast food chain of quick service restaurants by retaining authentic Indian taste and maintain highest hygiene standards in food quality. Our focus remains on network expansion and maintain high operational standards,” adds Venky as he is fondly called. 

FRANCHISE FACTS

No. of stores (company-owned + franchise): 300

Investment required : Rs 10 – 12 lakhs

Area required : 200 – 250 sq ft

Expected break-even : 6 – 8 months

Preferred cities & location : Tier 1 and tier 2 cities

Wai Wai City which entered into the restaurant business in 2016 by opening first outlet at Hauz Khas Village Delhi has changed the way people have actually dreamt noodles.

Wai Wai City aims to revolutionize the QSR industry with its innovative and unique concept. Wai Wai City is the extension of the hugely popular cult brand Wai Wai, which has been more than a household name for over three decades. “The first in its category, Wai Wai City’s Noodle Bars have built a strong base on the foundation of India’s love for Asian Cuisine. We use the freshest ingredients and offer a wide variety of innovative flavors at reasonable prices,” shares Varun Chaudhary, ED, CG Corp.

Franchise Network 

Wai Wai City is currently running 12 operational outlets out of which 11 are franchised and 1 company owned. The group is planning to open 1500 outlets internationally over the next 5 years. “We’ve sold franchise rights for over 17 states in India and will be commencing our international roll-out shortly with strategic tie-ups in the Middle East, North America, Europe and Australia,” adds Chaudhary.

FRANCHISE FACTS

No. of stores (company-owned + franchise) We are operating our outlets in multiple formats. Pls refer to the attached brochure for details on each one.

Area Right Fees+ Cost of Opening minimum 2 outlets+ warehouse cost+ Office: INR 25 Lakh_

Area required: 100 sqft- 1500 sqft depending on the format

Average Payback : 30 Months

Preferred cities & location : Pan India and Middle East, North America, Europe and Australia

Keventers to enter Middle East region by opening stores at UAE, Saudi Arabia, Qatar and Kuwait. Established in 1925, Keventers stands as the only brand in the Indian market which exclusively sells milkshakes only.

Inspite of having only one product on their portfolio and expanding magnanimously with the one product, the brand stands apart because of its original recipe and uber cool packaging. “The young generation identifies with the brand because of its retro chic packaging (Bottles) and with the older generation it is about connecting with a brand with a legacy which still sells original recipes,” shares Sohrab Sitaram, CEO & Director, Keventers.

Franchise Network

Keventers entered franchising in 2015 by opening its first outlet and is currently running 150 outlets across the globe, of which 14 is company owned and operated. “When we started Keventers in 2015, our focus was not just to revive an iconic & historic brand but also create a distinct identity for the milkshakes a viable beverage for today’s customer,” adds Sitaram.

The group is also planning to add 100+ outlets in next 12 months. For 2017 in particular, the plan is to enter and establish Keventers presence across the Middle East region including countries like UAE, Qatar, Saudi Arabia & Kuwait, and this will be followed by opening outlets in North America & Africa.

FRANCHISE FACTS

With the recent Supreme Court ruling banning the sale of liquor from establishments located within 500 meters of the National and State highways, a new real estate dynamic is at play. Two different categories of establishments have been impacted, with corresponding effect on real estate:

• F&B outlets located within malls and stand-alone restaurants located along ‘within city limits’ highways

• Liquor shops and bars located along national and state highways beyond the urban jurisdiction of the city

In the category of organized F&B players with establishments located within urban jurisdictions in cities like Gurgaon, ingenuous methods to increase the distance from the highway have been arrived at. Gurgaon’s Cyber Hub is an interesting case in point. Until now, proximity to main roads and highways was a key positive for a location. Now – at least for liquor-based F&B outlets and retail establishments, the reverse is becoming true.

The process of de-notification of many of these highways is underway, but there is a general sense of insecurity amongst bar and restaurant operators. In Mumbai, the Western and Eastern Expressway highways are being de-notified. From an urban planning perspective, this may not be a bad thing at all. Though the de-notification process is a reaction to a ban rather than a carefully thought-out change, it is a much-needed one.

In Mumbai, both the express highways (Eastern and Western) currently function more like city roads than highways. Within the urban jurisdiction of Mumbai, the character of these highways - flooded as they are with snail-paced vehicular traffic throughout the day - is that of a city road. Their definition as ‘highways’ in the classic sense is therefore highly debatable.

In the rest of Maharashtra, the Government has received proposals from Jalgaon, Latur and Yavatmal municipal corporations seeking to de-notification of highways, which have been okayed. In Pune, however, the municipal corporation has not yet sought to de-notify key highways. In this city, while some restaurants continue to function without liquor along the Mumbai-Pune Expressway, some others are relocating to areas beyond the 500-meter limit because going ‘dry’ is simply not an option.

The challenge is to maintain visibility and accessibility to transiting customers despite moving further inside the city. Hotels close to IT business hubs in Hinjewadi and Kharadi are most impacted. In Bangalore, hotels located on the outskirts of the city are understandably far from happy. In Tamil Nadu, the de-notification of Anna Salai in Chennai as a state highway is likely. The natural question of what happens to the upkeep of the all these highways post de-notification arises, and this is still a big question mark...

The Real Estate Perspective

From a real estate perspective, for the first category of impacted establishments, the nature of lease agreements (the commonly prevalent revenue sharing plus minimum guarantee model) is largely followed across malls in India. This may undergo a change if liquor-serving F&B outlets in malls close to highways are to survive. Liquor accounts for a sizable sum of the total monthly revenue generated in F&B outlets that serve it. With fall in revenues from liquor, overall F&B revenues have suffered heavily and meeting the demand of the minimum guarantee amounts needed to be paid to mall owners may become a big challenge.

The worry over inability to service rentals is fairly widespread among F&B operators in Sector 29, Gurgaon and on Sohna Road as well. A substantial mindshare of F&B operators has been taken up with the aim to resolve the issue of the liquor ban, and cash flows have been significantly impacted for now.

Will all this lead to the earlier fixed rentals model coming back into play? F&B operators are hoping the blanket ban may be revoked, because the current revenue share model works well and gives the lessee (tenant) the comfort that the risk attached with his business is shared by the lessor (owner). However, the landlord may want to lock into a fixed rental once more.

The Supreme Court ruling has come at a time when F&B presence is slowly becoming a massive differentiator between one mall and another. It is now a unique selling proposition of a mall, as the balance retail space is taken up by brands which are more or less uniform across major malls. The duration of stay at a mall - as well as the spends on other categories – are both largely being dictated by the kind of F&B present in a mall.

F&B’s percentage share of total leasable area of a mall has also gone up over the years. Whatever impacts F&B outlets will definitely impact the performance of other tenants in a mall, as well. The liquor ban will have a trickle-down impact on other retail categories in malls.

The second category of players - small restaurants, bars and liquor shops located along highways beyond cities’ municipal limits - may witness another kind of real estate impact. Currently, most highways in India are dotted with liquor shops as well as small bars serving quick snacks.

• Will there now be a growth of several quick service restaurants (QSRs) – the likes of McDonald’s, KFC or Dominos - which will replace liquor-serving bars and restaurants?

• Will more tea and coffee outlets like CCD or Chaayos crop up in locations close to highways?

• Will a larger number of Kamat-style restaurants and local snack joints emerge in such locations?

Landlords may consider looking at these QSRs or café and tea outlets as tenants now, as vacancy from current liquor-serving establishments is likely to grow.

The impact on both categories of players - the larger organized F&B operators within mall spaces and star category hotels, and the unorganized sector - is quite perceptible right now. If de-notification of the major highways does indeed take place and not rolled back, the blow to the sector will be softer. We will have to wait to see how the de-notification process unfurls across India. Hopefully, the fortunes of the F&B sector will soon recover.

We have been hearing since ages that when one wants a quicker return and he want to grow his business rapidly he need to franchise. Start ups or a layman who has never been into any kind of businesses but has a passion to own and run his own restaurant generally stuck while finding answer to his query...why franchise? If he is putting in his own money into the business he can directly rent up a space and open his own restaurant. According to the experts, franchising makes you learn the key aspect of driving and making your restaurant a brand. It is a great way to understand the business from scratch. According to reports, 95 per cent of franchised outlets are doing well today as compared to company owned restaurants.

David Griffith, who was a technology expert and has worked globally with some of the top brands, always had a desire to own something of his own and being a food admirer he thought of doing something in food business. When he shared the idea with his family and friends who is generally one’s first investment partner, they laughed on him telling this is not his cup of tea. Unable to start something of his own with no experience in running a business, he thought to take franchise route and it was then Subway was entering India. He took Subway’s franchisee and learned the art of running the brand and mastering the art of its growth. Today his Subway outlet at Bengaluru airport is awarded one of the top selling outlets in Asia Pacific region.

“Franchising is very great idea to grow one’s business as you are excelling your brand without putting the money, shares Griffith who is Founder & CEO at Habanero Foods International which is now running two of its home grown Mexican brands Burrito Boys and Habanero in South Indian market.

Similarly, Karan Tanna an Engineering graduate has a similar story who entered into the food business after working with some of the top MNCs. Tanna took franchise hold of Ahmadabad based Kutchi King and expanded it to over 200 restaurants in India. After working for the brand for almost four years, he exited the company by setting up a sustainable franchise model for the brand. Recently, he brought the franchisee right for famous QSR chain Genuine Broaster Chicken by bringing it to India by setting up stores in Mumbai. Today, in less than a year the brand is running four outlets in Surat, Kolkata, Raipur and Mumbai with 25 outlets already in fit outs.

“We are not hesitant to take franchise in any part of the country as we have tried to make the sustainable franchise model,” says Tanna who started Yellow Tie Hospitality adding that the franchisee doesn’t have to worry about anything as everything will be provided by them.

But because of the few wrong decision a brand fails to cater to the right kind of customer by opening at low traffic location with system which is not concrete. Hence, the right time to enter into the franchising model is when one is sure that his systems and processes are in place to expand the brand and take it to the next level of development. According to experts if you are opening at a low traffic location make sure you have a standard design and food so that people can recognise you. 

Tell us about the journey of Panchavati Gaurav.

Panchavati Gaurav was started in 1982 by setting up the first restaurant in Nasik. We opened the second outlet in 1987 in Nasik itself and then expanded to Mumbai by setting up the third in the city in 1995 and expanding to Pune with the fourth outlet in 2000.

How many restaurants are there within your brand today and what is the expansion plan?

We are operating around 30 restaurants in India and are planning to add another four this quarter. We have around 16 company owned stores and 14 franchised stores. We are now expanding via franchisees only.

What is the franchisee fee you charge from your franchise partners and what is the support you provide them?

We charge Rs 15 lakh from our franchise partner as a fee which is non-refundable. We provide complete support to the franchisee- staff, brand name, marketing, setup details, store location and also help in designing as we have architects and designer in-house.

What is the selection criterion for the right partner?

We are looking for partners who dedicate their time to the business and are passionate about it. Most of the franchisees today don’t work for their outlet. I always suggest one should not take a franchisee by loan. You need to give some time to get your restaurants hit the space and hence put in your own menu into taking a franchisee.

Tell us something about your food.

We are pure vegetarian quick service restaurant. We have 32 dishes in our menu and you can have as much as you can eat. It’s a QSR concept.

How is the pricing done?

The totally depend on city- in smaller city we charge Rs 260 for a thali and bigger city it is priced at Rs 400. Gurgaon is costliest and is priced Rs 500 for complete meal. We have a parcel box also for corporate which we deliver at 180 rupees in Gurgaon and in smaller cities we are delivering the same box at 150 rupees.

What is your plan opening an outlet in Delhi?

We are looking for locations in CP though the rentals are too high as soon as we get one we will open the same. We are looking at Noida as well.

What is your USP?

Our food is our USP. And, we believe in word of mouth marketing. Also, right locations are very important because it brings you the clientele.

What is your plan for 2017?

We are in about 14 cities. I am planning to open around 20 in 2017 and are focusing on cities like Aurangabad, Lonavala including others.  

How Mc Donald’s is observing the change in consumer taste and behaviour?

Over the years, there has been a steady increase in the number of people eating out of home and experimenting with cuisines. They are receptive to new products and services and want to be able to customize their menu items. They have moved from a testing phase to an indulgence phase where they prefer more indulgent and exciting products. They tend to show a variety seeking behaviour in terms of outlets and variety of food. The transformation in Indian consumer lifestyles over the years has also tremendously helped the IEO (Informal Eating Out) industry to grow and expand. Indian consumers are increasingly spending large sums, eating out with family and friends on weekends and holidays, churning up a huge appetite for the QSR business, so clearly the food retail industry in the country is poised for exponential growth. We receive consumers across all age groups as our patrons ranging from families, working population to retired grandparents.

What are the different options of burger catching up with the appetite of the Indian foodies?

We have a variety of burgers out of which the McAlooTikki was a massive hit amongst our fans. Indians prefer their food to be spicy and to cater to that we came up with Mc Spicy Chicken, we have the Mc Maharaja Mac in both vegetarian and non-vegetarian options, and we have the McSpicy Paneer, Chicken McGrill along with the McEgg Burger, Egg and Cheese McMuffin, Veg Supreme McMuffin, Veg McMuffin and the Sausage McMuffin which are a part of the breakfast menu. We have an all-day menu suitable for customers walking in any time.

As many Indians are turning vegan; how the demand for Non-Veg burgers?

Our menu is balanced with a 50-50 split between veg and non-veg options to cater to our customers’ requirement and meet the diversity in India. We see a healthy consumption of our products across categories and will continue to expand our menu in both categories. Since India has a large segment of vegetarians, we have re-engineered our operations to address their special requirements.

Has the recent report by Centre for Science and Environment (CSE) regarding cancer causing chemicals (potassium bromate and potassium iodate) in ready-to-eat breads affected the business? How?

McDonald’s India does not use potassium bromate or potassium iodate in the flour and all other ingredients that goes into our buns. The claims made by CSE in their press release and report are completely baseless and have not seen any impact in our business.

How are you attempting to bring in health conscious consumers amid slowing sales?

We at McDonald’s are ensuring that our offerings are aligned to the nutritional benefits that customers seek. We have made nutritional improvements through reformulation of our sauces. There has been an overall 7 to 8 percent impact in the calorie count of our products as our menu management team has worked towards reducing the oil content in our sauces from 67 percent to 25 percent. This has also been instrumental in bringing down calories in our sauces by up to 40 percent. We have reduced sodium across our various sauces, buns and Mc Nuggets by 10 percent and in our fries by 20 percent since 2013. Furthermore, our dairy products such as the popular soft-serves have less than 3percent fat, and we use only 100 percent vegetable oil (Palmolein - which is naturally transfat free). We also offer wholesome and grilled products in our breakfast menu.

What is your current presence of QSR’s? And what are the future expansion plans?

We cater to around 185 million customers annually across west and south India through our 242 McDonald’s restaurants and 89 McCafés (as of June 30, 2016) across 10 States and 32 cities. Going forward, we plan to invest Rs 700- 750 crores to establish 175 - 250 new restaurants within 3-5 years. We will continue to increase our retail footprint and fortify our presence in both existing and new markets (60:40) and 80 percent of our capital will be deployed into building more restaurants. We plan to double the base of 89 McCafé in the next 12-18 months.

What was Mc Donald’s revenue for the last fiscal?

We have had revenue growth of 12.1 percent year-over-year to Rs 856.8 crore along with riding the strong performance of the subsidiary Hardcastle Restaurants Private Limited (HRPL). Our performance in the second half of the fiscal year 2016 was better than in the first half. Despite a challenging market environment we recorded the highest level of positive comparable sales of 8.4 percent after 13 quarters.