In an interview to Restaurant India, Murali Krishna Parna, CEO, Sagar Ratna talks about the restaurant franchisee in India.
What is the business format for operating a Sagar Ratna franchisee outlet in India?
We need around 400 to 3,000 sq ft space in an appropriate location depending on the type of format. We operate Base kitchen formats, Service kitchen formats and Kiosk based formats that suit the location to get the best ROI. We operate in hi-streets, malls and hospitals too. Our format is all about producing fresh and good quality food daily, sometimes twice or thrice in a day. We differentiate ourselves by the food we make and the processes we follow to make it fresh from raw ingredients daily and apply skill so as to standardise cooking across locations. We are in the business of making fresh food like our homes with grandma’s recipes esp. in the core South Indian range of our products and that’s how we differentiate ourselves.
What are the elements that one needs to keep in mind while choosing a Master franchisee and a Sub-franchisee?
Ideally, if the prospective franchisee has a commercial property that can be used to open a restaurant in a good location, a willingness to invest in building customer loyalty, understand importance of quality to grow business in the long run and manage employees to keep attrition low, we will be keen to work with such partners.
How does one decide on locations? Is the franchisor or the franchisee responsible for taking such decisions?
We have different formats for different locations. Locations ideally are assessed for business potential based on the Footfalls, Residential households and the type of households, Strength of offices or work places, Competition intensity, Price sensitivity and importance of the location for people to visit (What need). We share our learnings on the site selection with our prospective franchisees.
What is the Revenue Sharing model between the two?
Royalty is not a fixed amount for us and it’s always a revenue share so that our growth is dependent on our partner’s growth. It’s a fixed percentage for the period of the franchisee term. We are assessing possibilities of increased percentage over a period of time as a model but this is only a discussion at this stage.
What is the Growth Prospect and Future agenda for the segments in India? Who is your top selling franchisee?
We strongly believe health and nutrition will become important over time. We are rightly positioned now by making fresh foods with fresh ingredients and focussing on the health aspect as well apart from being fresh. We see a very high demand for the category that we operate in as the demand for our products are from breakfast till dinner. There are very few foods that are conducive for consumption across all meal hours including mid-meal snacking as well…