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Jun, 13 2019

BIG RETURNS, FAST AND CASUALLY!

The latest concept in the restaurant business worldwide is that of fast and casual eating out, which means that you get a larger variety of tastes at relatively lower prices with some great ambience and fun thrown in for extra pleasure.

Fast and casual – that is what is now trending when it comes to the global restaurant industry. To define a fast casual restaurant, it is one that combines elements of quick service with the experience of casual dining that is relatively low on cost but often provides ambience and varieties of food more associated with sit-down dining.

GROWING DEMAND

“Consumers are getting more adventurous and open with their palate which is adding to the overall eating out culture and driving growth in consumption,” shares Saurabh Khanijo, Director, Welgrow Hotel Concepts, whose restaurant Shophouse by Kylin has got a wonderful response in NCR. Karan Tanna, CEO, Yellow Tie Hospitality, says, “Consumers now prefer concepts that are ‘younger and cooler’ and are moving away from mundane fine dining concepts. Consumers not only want good food and service but also prefer some kind of an added advantage and experience; it could be a live music gig or some kind of theatre happening in the place. That’s why we see a lot of modern fast casual restaurants coming up.”

BUSINESS MODEL

To start a fast casual restaurant, typical investment required is anywhere between Rs 30-85 lakhs depending on the area of the restaurant. Ideally, a fast casual restaurant requires an area of 300-1,000 sq. feet. The startup cost includes expenses of Rs 18 lakhs on kitchen and bar equipment, Rs 10-15 lakhs on interiors, up to Rs 1-2 lakhs on licenses and registration while the one-time franchise fee may go up to Rs 20 lakhs. A fast casual restaurant may require 10-18 employees with total salaries ranging from Rs 2-3 lakhs per month. The rent could work out to Rs 3.5 lakhs depending upon the location while the raw material expenses would roughly be about Rs 7 lakhs. And additional Rs 2.25 lakhs would have to be reserved for miscellaneous expenses, including electricity and water.

With monthly revenue of Rs 25-30 lakhs and monthly expenses of about Rs 15 lakhs, the owner can make gross profits in the range of Rs 10-15 lakhs. In a typical franchise setup, businesses can breakeven in 24-30 months. “Brand awareness is the key factor. We have realized that it is all about quality, reasonable pricing and providing a unique experience, which helps in getting good returns,” points out Krishna Gupta, Managing Director, 1441 Pizzeria, which has an average footfall of about 4,000 per month with average spending of Rs 450-500 per person.

WHY FRANCHISE?

According to many industry experts, the franchise model is the best way forward in this space. “The restaurant business comes with a lot of challenges as far as kitchen operations and training is concerned. Having a franchise partner who can give ready-to-serve recipes so that dependency on the outlet level staff is reduced and who provides training will make it easier for the owner to operate the outlet,” adds Tanna, who offers end-to-end solutions to his franchise partners. Gupta adds, “Starting your own restaurant is not easy and a lot of startups shut within the first 15 months. We have a tried and tested concept which is evergreen without most of the unpleasantness that comes with starting something new. We have a central kitchen that supplies all the required goods and food items.”

FUTURE PROSPECTS

Since the fast casual concepts are more open to customers where they are aware what is being cooked and baked for them, it automatically becomes more scalable. From concepts like ‘do-it yourself’ wherein you can customise your food and decide on what toppings and sauces are to be added on your pizza, it is becoming a favourite among young crowds who always look for some fun and quirkiness on the menu. “If the customer likes the food and the complete experience, he visits at least three times a month as per our repeat customer ratio,” adds Khanijo.

He is therefore looking to expand his business across India, focusing on metros in the first phase.

“We are running 25+ outlets of Genuine Broaster Chicken pan- India and the response has been great. We are looking at opening around 60 more outlets by the end of this year,” adds Tanna. He further shares, “We are looking at places such as Varanasi, Udaipur, Ludhiana, Chandigarh, Bhopal, Indore, Nagpur, Nashik and Kochi, among others.”

STARTUP COST:  30–85 lakhs

OPERATIONAL EXPENSES:  15 lakhs

MONTHLY REVENUES:  25-30 lakhs

GROSS MARGINS:  10-15 lakhs

BREAKEVEN TIME: 24-30 months

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