Casual dining Feb, 02 2016

How to make best returns out of casual dine business

By Amanpreet Kaur, TFW Bureau
Chief Sub Editor
How to make best returns out of casual dine business

A casual dining restaurant is a restaurant that serves relatively affordable priced food in a casual atmosphere. Right after, Quick Service Restaurants (QSRs), Casual Dining Restaurants Industry in India is the second most popular category within the food and beverage (F&B) space. 

Currently, the Indian restaurant industry is worth Rs 75,000 crore and is growing at an annual rate of 7%. This segment is majorly driven by young population aged between 15-44 years. The other propelling factors behind the growth are disposable incomes, growth of consumers in smaller towns and broadening exposure of new cuisines, rapid urbanisation and the higher frequency of eating out has evolved the market for the food services industry in India. What’s driving the demand of CDRs is the shifting lifestyle trends with wide variety of menu offerings and flavours. Eating out has now transformed from occasion driven to becoming a regular activity even on weekdays apart from weekends only and they are gradually moving from fine dine to enjoy more of casual dining culture. To rake in more moolah, the restaurant chains are innovating and modifying their menus and product offerings to generate more revenue streams.

Opportunity ahead!

Within this segment, there are host of national as well as international brands that have been doing well and spreading their footprint by tapping franchise model for expansion. Top brands like Pind Balluchi, The Great Kabab Factory, Noodle Bar, Chili’s, Ruby Tuesday, Sagar Ratna, Barbeque Nation, Tiffin Box etc, a venture of KA Hospitality and many more are exploring the franchise route for expansion. International players are also tapping the prolific Indian market to grab market’s share. Recently, the premier fondue restaurant and a leading polished casual dining franchise – The Melting Pot announced its India entry plans. 

As confirmed by Dan Stone who is the Chief Business and People Development Officer for Front Burner, the restaurant management company of The Melting Pot, “Numerous U.S. based food concepts have experienced success in India in recent years. The customer base and potential in India is significant. Yes, we have initially identified 10 units for the aforementioned markets, as well as the cities of Pune, Chandigarh and Kolkata.” Currently, The Melting Pot operates more than 125 restaurants across 35 U.S. states, Canada, Mexico and the United Arab Emirates, and has more than 15 locations in development internationally. Other than that, South Africa-based casual dining restaurant chain Barcelos is also planning to set up stores over the next four year in India. 

Rohit Malhotra, GM – Operations, Barcelos confirms, “By fiscal 2017, we plan to open about 10 more outlets. We will open four outlets by the end of the current fiscal. We plan to invest USD 5 million by the fiscal year of 2017. With about 25-30 outlets in India, we are targeting Rs 200 crore turnover in four years time." The firm, which opened its first restaurant in India in New Delhi in March, intends to set up its new stores by company-owned and franchise modes. Delhi-NCR, Kochi, Chennai, Mumbai, Jaipur, Pune, Hyderabad, Bengaluru, Goa and Kolkata are among the locations, it is eyeing at expanding its base. 

Barcelos, which has introduced Black Burger and Red Burger first time in India, is also on its way to expand its menu and increase food and beverage offerings. It runs more than 120 outlets across 18 countries including the UK, Sweden and the Middle East. Also, Dubai based Kulcha King a casual dining concept plans to make a foray into international markets such as the GCC, the UK and India. 

  • For opening Sagar Ratna’s (the most preferred destination for South Indian cuisines) franchise, a minimum of 2,500 sq.ft of space at high traffic location preferably on ground floor would be required.
  • A typical Pind Balluchi can be successfully operated in approximately 3,000 sq.ft of retail space with high density Sec A to B+ category residential or floating population.

So, you’re thinking of opening a casual dining restaurant? Here’s checklist that will help you find your way through.

  • High footfall location, either on a high street or a mall can be tapped for opening CDRs. 
  • Key challenges include the dearth of quality infrastructure, skilled manpower, skyrocketing real estate prices, lead time to obtain no of licenses required in addition to taxes.
  • Malls get more customers and that’s why it is preferred for opening a mid- level casual dining restaurant.

As per Grant Thornton - FICCI Report 2015 on Food & Beverage industry, the dining out culture has evolved in India over time with casual dine restaurants now forming the second largest segment with 32% market share. In 2013, the size of the casual dining market is estimated at around INR 66,000 crore, and projected to grow at a CAGR of 10% to reach a size of INR 106,818 crore by 2018.

Related: Invest in Desi labels in women wear

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