In an exclusive interview to Restaurant India, Unnat Varma, MD, Pizza Hut India talks about Pizza Hut's growth as a franchise brand in India.
After splitting franchise for the business in India how does Pizza Hut growth looks like?
For us the business was always franchising. We had two great partners for 20 years, in North and East we had Devyani International and in South and West we had Dodsal Group. Then, Dodsal was looking at exiting the business so Samara Capital which has established Sapphire Foods had taken over the business at that part. We have been fully franchised in all these years.
As a leading global QSR brand globally. What is unique about Pizza Hut’s franchisee strategy?
Franchise model is a fantastic model where you are able to leverage and partner with local businessmen who have great knowledge of running business, building the business, leading the organisation, building a very strong culture and people, and we are able to provide them the global brand and global learning, so it is a fantastic combination and for Pizza Hut it is getting great around the world and in India. We have partners who have signed up for growth, have partnered to expand rapidly.
How much does franchise model help in growing business in a region?
Franchise model helps a lot, I think around the world most brands operates with franchise model and it is critical for a company/ brand growth to have a franchise model in order to get quick returns.
How have you mastered the art of selecting and retaining the right franchisees?
For us the match has to be at two or three different levels-
1) It is absolutely critical for a franchise partner to have that value system that the brand has. Value system means that the customer is always right, hiring very high level of focus who works in store and we pay high note to customer experience and it should be taken care. We are focused on very high organisation so that people work in a fantastic environment.
2) We work with partners who are always aligned not just with company strategy but also right ways of doing the business and follow the rules of the land.
3) Very well capitalise and willing to put up investment.
How many outlets are there in Pizza Hut system today?
We are fully franchised i.e 400 outlets are franchised. It is 70:30 split between Devyani and Sapphire Foods.
Who is responsible for selecting the locations- it is from your end or the franchisees?
We jointly decide on the location with the franchised partner as franchisees have very strong relation with the real estate builder, developer and have very focused team on grounds. Whereas, we have all analytics and tools to understand which location would serve the brands requirement at that particular point in time. Hence, franchisees bring in local relations and experience and we master them with analytics and expertise.
What is the target location at present?
We have different format for different locations- Pizza Hut restaurants concept do well in large shopping malls- Select CityWalk, Ambience Mall Gurgaon, GIP and high street locations like Janpath but it has to be high footfall, high traffic and weekend traffic. However, delivery outlets do well in neighbourhood location which has access to residential places and offices and location markets and commercial centres.
How about entering three Tier-III cities?
We have entered close to 100 cities, including many tier II and III city and the objective is to open outlet in centre of that town.
Which are some of the top selling outlets?
Outlets at GIP, Ambience Mall, Janpath, Select Citywalk are doing great numbers in Delhi-NCR, Powai, Inorbit Mall are building high in Mumbai. And, premium residential and high-end malls are highly beneficial for us at any location.
Tier II largely for us is one store preference. And, one store in right place is doing good- Gaya, Gorakhpur, Udaipur, Jodhpur and Mohali is doing well.
What is your expansion plan?
We are seeing little slow down in retail and the kind of numbers we were expecting in terms of consuming class coming and eating could not be seen. We are trying to make sure to make successful stores and will focus on 1000 stores by 2020. But the focus here is to consolidate and then we will want to take it forward.