7 Key Factors to Consider Before Starting a QSR Business in India
The fast food concept in India has seen a rapid growth in last few years and the Quick Service Restaurant (QSR) is the hottest concept in restaurant dining. While this is a great opportunity for food entrepreneurs to capitalize on this trend, but this business is not very easy to scale, unlike the technology business.
In this entrepreneur interview, Ashish Kapur tells us why the Indian F&B market is so interesting, how food entrepreneurs can break-even early and 7 key factors to consider before starting a QSR business.
Q: What makes the Food & Beverages (F&B) market in India so interesting?
India is the second most populous country in the world. Moreover, we are the second largest producer of food next to China. Obviously, the scope in food industry is very encouraging. However, the key reasons why the F&B market is so interesting are:
- We have more young affluent Indian consumers today with high disposable income
- These consumers have traveled a lot and are willing to try out new cuisines due to changes in lifestyle
- Today, eating out is about experimenting with food and developing new tastes and not about filling the stomach
- With more than 50% of Indians below 25, this is a big group who is open to try new things and spend on food and beverages
Q: Yo! China is present at 43 locations across India. What steps do you take to ensure consistent quality and food safety is maintained at each of these places?
To maintain consistency in food and to ensure top quality, our supply chain network has a dedicated pool of certified vendors. All the supplies are routed through a centralized logistics network. The key products like dumplings and spring rolls are manufactured in a state-of-the-art in-house food production unit in Gurgaon.
All staff is trained on production hygiene. Chefs are also regularly trained on all menu preparations where the quality of each dish is classified into its appearance, portion size, freshness and taste. This helps in maintaining consistency and food safety throughout the system.
Q: Apart from Chinese food, do you have any new offerings for the F&B market?
Over the next one year we’ll be opening 10 youth-friendly cafes called Yo! China Cafe. These will be large-format cafes with an average built-up area of 2,000 sq ft and will serve alcohol and specialty desserts.
Q: Gestation period for a restaurant is high (2-3 years) and by the time it gets stable, consumer choices change. How can an entrepreneur tackle this challenge?
Today more and more people prefer the fast food type of format. The concept of a typical restaurant is almost obsolete until it serves a specific type of food (for example Rajasthani, South India, etc.). So the more optimum format you have, the earlier you’ll break even in business.
Secondly, you have to maintain consistency in your services otherwise repeat customers will be few. To do that, create processes and systems to ensure your quality of food and taste is not compromised. Hire talented people who can handle large scale operations and who can execute orders successfully during rush hours. Standardization and centralization are critical to the success of a QSR.
Q: Quick Service Restaurant (QSR) format is very popular these days. What are some of the important factors to consider before starting a QSR in Tier 2 or Tier 3 cities?
Most QSRs usually follow a business model where the food served to customers is unique (Pizza, Chinese, Salads, etc.) In order to succeed in this business, you need to do your homework and consider factors such as:
- Decide the format and type of food you will serve
- Figure out how much money you will need to get started and how you will raise it – personal savings or VC
- Start your QSR in a location where there is lot of traffic and visibility
- Establish proper systems and processes for cooking, serving and delivering food
- Establish a strong supply chain
- Build a team with A players
- Imbibe ethical principles, strong values and integrity in business operations
Q: What advice would you give to food entrepreneurs who are planning to enter the F&B industry?
In the coming decade, the F&B industry will grow rapidly. This is a great opportunity for food entrepreneurs to get started. In this business, when you’re providing a value-based product, you have to build a strong brand-equity. Have a broad vision, be agile to adapt/react to change, innovate and keep learning about your customer preferences and you can build a world class food brand that is scalable.
About Yo!China: Yo!China is India’s largest chain of Chinese restaurants with 50 points of presence restaurants and delivery outlets in trendy locations across 14 cities. Know more about them at www.yo-china.com