Hotline: 1800 102 2007
Hotline: 1800 102 2007
Search Business Opportunities
people 2013-10-07

Indian brands have been more successful than foreign brands

Interview with Rahul Chowdhri, Director, Helion Ventures Advisors Pvt. Ltd.

Indian brands have been more successful than foreign brands

In an interaction with Franchise India, Rahul Chowdhri talks about the problems faced by investors and the challenges before budding restaurateurs in terms of getting investors.

Good quality entrepreneurs have to be found because they never approach us. That way we make proactive efforts to reach out to companies. If someone has built a decent business model, then there is a strong desire from investors to invest. If there are multiple formats in the early stage of the business and multiple cities are not yet proven, it becomes difficult for the investors to judge whether this business can be scaled. Unlike technology which is non-linear business, restaurant business is fortunately a linear business, i.e. you get revenue by store. It is not that the same store next year will give you 50% more revenue. One has to do more number of stores and hence execution becomes very difficult. It is very easy to scale to 10 store chains, relatively easy to scale 50 store chains but hard to scale to 200 store chains. That belief comes only because of quality of the team and exhibitions.

On the challenges faced by investors

Food has been a challenge in terms of people wanting new every year. The restaurants need to keep on innovating to keep up with the excitement. There are not many companies who have proven that they can scale.

Challenges faced by restaurants in raising funds

The challenge is almost same in all businesses: how do I get enough money to prove that I am good. No one gives money till you have proven. So all investors look for unique model be proven in multiple locations, proven in multiple cities. So restaurateurs must look for different class of investors in early stage of the project. They may not get good investors but can get individual angel investors who are willing to give money even for small time businesses. Once you are ready to hit the growth pedal, you can go for more investors.

On why foreign restaurant chains open in India and become successful than their Indian counterpart

I won’t agree that foreign brands that come to India are hugely successful in comparison to Indian brands. Some of the foreign brands, like McDonald’s or Domino’s have been around for seriously long time. I do not have any idea of the investments they have made. But if you look at the amount of capital that has gone into some of the Indian brands from capital to revenue ratio or capital to profit ratio, my guess is Indian brands have been more successful than foreign brands even though they do not have access to capital that foreign brands enjoy. If there are more structured processes in Indian brands, they too can scale much faster.

Advice

A food business takes time; you can’t build a large food business in five years. That is why one needs to be more patient since the investors are also not there in the beginning. I don’t think dining out as a habit is going to see any decline. If the economy is not going, people will shift to more value-based food. Otherwise the people will go to higher product. So my advice to most of the food businesses is if they want to scale, keep on figuring out a suitable model. 

Comment
image
image
image
Related opportunities
  • Kids Entertainment Zones
    About Us: Little Kickers is UK’s biggest and most successful pre-school..
    Locations looking for expansion Oxon
    Establishment year 2002
    Franchising Launch Date 2002
    Investment size Rs. 5lac - 10lac
    Space required -NA-
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Blewbury Oxon
  • About HPS: HPS [Hyderabad Public School Pvt Ltd] is one of..
    Locations looking for expansion Andhra Pardesh
    Establishment year 2009
    Franchising Launch Date 2010
    Investment size Rs. 50lac - 1 Cr.
    Space required 10000
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater 0 Andhra Pardesh
  • CAD/CAM/CAE & Multimedia
       About Us : Frameboxx Animation & Visual Effects offers skill-based curricula..
    Locations looking for expansion Maharashtra
    Establishment year 2008
    Franchising Launch Date 2008
    Investment size Rs. 20lac - 30lac
    Space required -NA-
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Mumbai Maharashtra
  • Ice creams & Yogurt Parlors
    About : Ice Cream factory is an innovative live ice cream..
    Locations looking for expansion Maharashtra
    Establishment year 2012
    Franchising Launch Date 2017
    Investment size Rs. 10lac - 20lac
    Space required 225
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Mumbai Maharashtra
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories

Free Advice - Ask Our Experts