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Aug, 01 2007

A MOUTH WATERING OPPORTUNITY

DESPITE the mushrooming of a number of fast-food joints across the country and the onslaught of pizza chains in every nook and cranny of India, there is no denying the fact that nothing gives Indians the same spicy flavour as does the Indian street food.

DESPITE the mushrooming of a number of fast-food joints across the country and the onslaught of pizza chains in every nook and cranny of India, there is no denying the fact that nothing gives Indians the same spicy flavour as does the Indian street food. The teekha, meetha and chatpata chaat are some of the mouth watering dishes which the Indian consumers truly relish.

Indian street food comprises of vada paav, chaat and various other fares available at lower price. Besides the low price, what really attracts Indian consumer is the easy availability of the food as the chaat corners can be found in each and every Indian city whether big or small. However, hygiene and safety remains the core issue of the Indian street food that gave a high to American

fast-food which is prepared in a safe and sound man-ner. But American fast-food will not be the only one to serve the Indian taste buds as the Ferns 'n' Petals Group takes on the charge to popularise the Indian street food and serve it in a safe and hygienic way with their new venture Chatak Chaat.

Birth of a new concept

Serving the Indian palate was the dream of Vikaas Gutgutia, who is also a lover of Indian street food. Gutgutia is the founder of Ferns 'n' Petals (FNP), the only branded retail chain of flowers in India. Started as a single outlet, Ferns 'N' Petals today boasts of over 58 outlets nationwide. If this is not all, the company has revolutionised the concept of franchising in this sphere. In addition to the company's own outlets it has a network of 65 strategic alliances in India for national deliveries and 156 vendor partners outside India for global deliveries.

Excited about his new venture Gutgutia reveals Chatak Chaat's expansion plans, saying, "If McDonald's and Domino's can proliferate with food offerings from overseas in India, Chatak Chaat will proliferate with its Indian food offerings overseas."

How the company is expecting a bullish response for Chatak Chaat, replying to this, Gutgutia says, "We expect Chatak Chaat to gain much higher market penetration owing to the mass acceptability of the product and the fact that the product caters to a range of diverse age groups."

Just entering the F & B sector was not the sole aim of the company. The FNP Group brings with itself years of experience in retail as well as franchising. FNP would be adding two special advantages in its new brand. Firstly, there is a lot of retail experience that Ferns 'n' Petals brings in, which comes from the understanding of the retail operations. The second aspect is the supply chain. Ferns 'n' Petals is known for its richness for being present for 10 years in the market. That is the ground where the company stands.

With the aim to tap the regional Indian chaat delicacies and projecting to make a successful street food venture in this category, the company has come out in this segment under the brand name Chatak Chaat. The idea to turn this passion for chaat into a business opportunity started in late 2004 and with usual quick approach, by the end of 2005, FNP launched the feasible study, which.

Taking the bull by the horns

The biggest problem that our Indian street food market is facing today is that it is largely unorganised and no concern is given to issue like hygiene. Chatak Chaat aims to tackle all these problems in its new venture. Hygiene is strictly followed and has been included in the company's policy which makes it stand apart from the local chaat seller. If we look at the market size of Indian street food, it is essentially clubbed with fast food and largely remains an unorganised sector. Even independent figures are not available for the street food sector. The company's aim is to make the sector more organised but it is not an easy task. There were hurdles to break the mindset that it is impossible to make street food selling an organised business.

A large palette of food offerings to choose from

The company also has a wide range of products under its kitty. To name a few it offers Rajasthani Dahi Bada, Palak Patta papdi chaat, Kolkata Jhaalmoori, Matter Rajkachori chaat, Rajasthani Kanji Bada, and many more items which are not easily available in Delhi. Its range of retail products comprises of up to 25 products. However, there is a larger range of products available for banqueting and the range is ever changing owing to innovation.

Talking about various strategies to make the new venture successful, Gutgutia says, "We are working with the process driven approach, with which we can maintain the standard and the quality of the product. We also work with the strictly controlled supply chain process, which again helps us to maintain our quality."

Understanding the peculiarities of the Indian street food market, the company has given extra emphasis on its supply chain. Chatak chaat supply chain outlet comprises of supply of interim food material which is partially perishable and partially non-perishable. Each outlet of chatak chaat is supplied with fresh products at the start of the day and left overs are returned to the commissary where the shelf life of the product is monitored and accordingly re-used, if possible. Emphasis is also laid on the sourcing of the raw material for the chaat. Some critical ingredients are sourced from the region of origin barring which products are sourced locally but that too under very stringent standards.

Franchise model of Chatak Chaat

Chatak chaat operates its retail model under the following formats:
Stand alone shops: 150- 200 sq.ft
Store-in-store: 150- 200 sq.ft
Carts: 7feet x 3 feet - essentially on high streets
Mobile chaat shops - operated from a specially designed commercial vehicle.

With the company's successful experience in the franchising of flower business that helped it gain new heights, FNP Group knew that franchising was the only way to fulfil its plans of expansion. The added advantages of franchising like, public-private partnership and expansion in a short period of time within multiple cities would also be fulfilled.

A lot of emphasis has been given while developing the company's franchise model which serves the business interests of franchisees in the best possible manner. The Area Franchise model is based on the concept of creating feeder satellite kitchens at short distances in any city catering to an average of 25-30 outlets in the catchment area. The key feature of this model revolves around partnering with the franchisee in all aspects. Total investment in an area franchise is in the range of Rs 60-65 lakh with returns expected per outlet pegged at 25 per cent of sales leading to a break even period of 1.5 years for the venture.

The element of franchise fee has been modified to each city and the complexities of geographical area based on the extent of technical skills transfer required for the project. e.g. Mumbai as a city could have up to 7-8 area franchisees wherein each area franchisee runs 25-30 outlets in his area and each area could have a different element of franchise fee.

The most unique feature of the Chatak Chaat franchise model is that the company does a 51:49 partnership with the franchisee where it actually invests 51 per cent of the total investment in that franchise. The company does not have a franchise fee but a component called technical skill transfer fee. This fee is utilised to provide the technical know how for the product and customise the supply chain for the model as per its geographical location.

Chatak Chaat is looking for franchisees, who are willing to devote time to study their operations and believe in the concept. A potential franchisee can be a non F & B person also but he needs to have passion, drive, commitment, determination, good communication skills, good people skills and administrative skills.

The company has huge expansion plans for the Indian market as it plans to open a total of 200 outlets in one year. To start with, the company is looking at setting up bases in 6-8 Indian cities. The company is targeting various cities with its new venture. Essentially it wants to spread over tier I and II cities including Chennai, Hyderabad, Mumbai and cities of Gujarat and Punjab. We hope to touch a turnover of Rs 8-9 crore in this year, said Gutgutia.

With the entry of organised players, the industry is set to grow further and make Indian street food popular amongst fast-food loving consumers. With 15 outlets at present and 20 more sign ups, the company is readying for opening one outlet everyday. Chatak Chaat will have 35-40 company owned outlets that will be looked upon as a pilot project. The company is all set to break the ground in the Indian street food market.

For franchise queries contact Shalini Gera, GM Chatak Chat,
Mobile: 9910065187, 9310769206.

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