'The market is growing rapidly'
Sanjay Narang, the founder of Sky Gourmet and Mars chain of restaurants, such as Just Around The Corner, Birdy's, China Joe and All Stir Fry, was among the first to gamble with the format of chain restaurants in the city. He gives us a ringside view of the business.
What is the biggest challenge while setting up a chain?
In today's scenario, it has to be real estate. Ten to 15 per cent of sales have to be pumped in to purchasing property, with prices having increased by 25 to 30 per cent over the past few months. With these nightmarish land rates, people prefer getting into food courts in shopping malls, where you end up paying a smaller percentage of your sales as rent.
Also, for a chain to survive it's imperative to centralise production. Once the number of outlets begins to expand, managing production from individual outlets becomes near impossible. So for the thrust of volume there has to be an infrastructure for a central kitchen.
Does the city hamper the process of setting up chains?
The real estate cost is prohibitive. Also, many buildings are averse to having restaurants and food chains in their premises because of the staff hanging around, the cooking smells, delivery trucks pulling in, the racket. Because of this, getting space in old buildings is very difficult.
The restaurant market is growing rapidly, and there is demand, but the ratio of consumers to the number of restaurants mushrooming is not keeping pace. That's a definite hindrance.
Once a business model involving chains has been identified, what is the biggest challenge in making it a success?
We at Mars learned the hard way. For example, Dosa Diner was quite an experiment. What that chain required was someone with extraordinary talent at preparing these unique dosas we had devised. That kind of talent is very hard to come by. If it's a run-of-the-mill fare like butter chicken or pizza, then trained chefs aren't a prerequisite because in any case, the pizza Mumbai eats isn't authentic.
Finding and retaining quality kitchen staff and maintaining a quality kitchen is key to a chain's success. If it's a chain like McDonald's, there is no question of trained staff because all their produce is factory delivered.
For start-up entrepreneurs is a chain model easy to follow through?
Individual restaurants have a huge potential, and are more likely to succeed if they are owner-driven. Scaling up operations is not always feasible. But a stand-alone in any one locality can have a lot more character; there are higher chances of maximising on the day-to-day aspects of the restaurant, if the owner is around to supervise the functioning's and add his personal touch. But trying to roll out a brand by randomly assembling four or five managers to run a chain may not guarantee success.