food and beverage Sep, 05 2011

Destination campus for F&B brands

Food and Beverage franchisors have always done well in shopping malls and high streets. These players have now identified educational institutes as the best revenue generating locations. Read on know more how franchisors are cashing-in on from this latest

By Abha Garyali
Sub Editor
Destination campus for F&B brands

The most popular franchise domain, education is now offering a lot of scope for food and beverage retailers and franchisors. Having set-up their outlets at malls and high-streets successfully, f&b players are now eyeing the educational institutes as a profitable location for their franchise outlets. It is well-known that food and beverage (f&b) industry consumes the maximum share of disposable incomes in India. Moreover, with three-fourth of population being young, India is emerging as one of the fastest growing fast food markets in the world. According to the National Restaurant Association of India (NRAI) 2010 report, the fast food industry in India is currently estimated at Rs 8,000 crore and is growing at a CAGR of 35 to 40 per cent annually.

Considering the growing fad in Indian youth for fast food, and hidden potential of markets around educational institutes, f&b franchisors have come up with a unique idea of attracting youth and are capitalising on opening their outlets in or around educational institutes.

Targeting Educational Institutes

Traditional unorganised food outlets in the form of canteens in schools, colleges and universities have given way to more organised branded food outlets. Franchisors have not only taken the share of traditional f&b retailers inside educational institutes, rather they have also occupied the market surrounding educational institutes. Here are a few factors for educational institutes becoming a hot favourite among f&b franchisors:

Students and youth shift to cities for higher education:  There is an increasing trend in youth to move out of small cities towards metros and big towns for better education and career prospects. They are staying as paying guests (PGs) or in hostels and often eat out with friends in preferred organised food outlets.

Experimenting different cuisines: Youth always prefer to experiment with new cuisines and fast food. Therefore franchisors are geared up to attract young clientele to their food outlets by opening new branded outlets in the old campus.

Increase in spending power: With both the parents working and giving their children the best of everything there is a growing trend among youth to eat in organized food joints. To add to this is the coming up of  BPO’s and call centres having majority of the employees as students  doing part time jobs.  So they do not mind even spending few extra bucks on eating out.

Preference for branded food and beverages:  Increased awareness among people especially youngsters regarding health have led them to consume an expensive healthy food rather than an inexpensive road side food.

Saves time: Organsied fast food joints are specially meant for students who don’t have time to cook or to wait for meals to get prepared in homes and hostel canteens. So instead of missing their important classes while waiting for food to get prepared they prefer eating at a fast food joint near their college campus.

Brands cashing in on the trend

F&B franchisors across the country are cashing in on this latest trend and are in race to grab the maximum pie of food franchising in and around educational institutes. Some of the prominent brands following the trend are Kaati Zone, Au Bon Pain, KFC, Yum Yum Dimsum; ice cream parlours or carts like Amul (Gujarat Cooperative Milk Marketing Federation Ltd) Cocoberry; Café chains like Coffee Day Xpress etc have ventured into this profitable location.

RS Sodhi, Managing Director, GCMMF Ltd (Amul) informs, “We are keenly setting up our kiosks and ice-cream parlours near Amity School of Business, IIM’s, IIT’s and other such educational institutes as sales have really increased at these locations.” Kaati Zone, a QSR (quick service restaurant) chain that sells kaati rolls, is also eyeing schools and colleges. Kiran Nadkarni, CEO, Kaati Zone also says, “Our target consumers are the youth. Therefore setting our small formats near educational units is the best step forward for us.”

These franchisors are opting for both large and small formats to open their outlets. Out of these small formats like kiosks and carts are the most popular formats.

Kiosk and Carts as the Preferred Format

Establishing large restaurants and eating joints near educational institutes is a difficult task and may require a lot of capital from franchisees. It is also tedious and time consuming to get license from government officials for setting a new restaurant. In such circumstances a kiosk or a cart is the most beneficial format to start your franchise journey. Kiosks and carts are included in low-cost businesses, requiring low capital to start-up as well as for running it successfully. Moreover this format is especially popular in food and beverage sector. With this format catching up speed it is little wonder that it is the best format for entering new avenues like educational institutes. Franchisees can easily set up their branded kiosk of coffee, QSR or ice-cream and attract large footfalls of students as well as of visitors and teachers. Nadkarn shares, “We have taken the kiosk way to expand in new and unique location because kiosk is a small budget but high profitability format.”

Word of Caution

Setting up a kiosk or an outlet near any educational institute is the latest trend and may fetch great profits to franchisees as well as franchisors. However it may have its set of limitations as well. In this case also franchisors should always be prepared to see symptoms of ‘food fatigue’ among the students. It is generally seen that youth have a short attention span and get tired of things soon and look for better options.

Related: Freeze profits with cool prospects

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