Saturday, 19 March 2016

Thinking of starting a QSR chain? Have you checklisted these?

Food and Restaurant trends for 2016 reports that more and more people prefer Quick Service restaurants with local flavors, fancy menu at a reasonable prize than a fine dining experience.  The Indian QSR market is expected to touch a whopping 25000 Cr by 2020, surging up with revenues growing at a rate of 25% per year.  Reports say that an average Indian middle class family eats 8 times a month outside is in a Quick Service Restaurant {QSR}! In India we have seen a rapid growth of US origin QSRs such as McD, Burger King, Dominos as well as our own popular ones such as Faasos, Goli Vada pav to name a few.

So what differentiates a QSR from other restaurants? A lot of budding entrepreneurs in the food business have this big dream of running a QSR chain. Here are the top 5 Checklists for a successful QSR Plan

1. A centralized recipe management system: When you dine in a QSR, there is no difference in taste no matter where it is located.  The taste and recipe has to be repeatable in not just 10 or 100 but in 1000s of joints. Standardization and the ability to train towards this is a make or break factor. Find that particular recipe management system that will work for your business, fine tune it, use it.

2. Scalability: The second element to establish is scalability. Can you scale such that you can start and run at the rate of 30-40 new outlets every year? To start 100 outlets with a Powerpoint impressed VC fund is quite simple, but that is just expansion. What one needs to achieve in scalability is growth with profits. This is where very standardized cost and inventory management along with strict practices will play a key role. And this where most QSR fail to show profits.

3. The choices on Location: Can you be so smart about your location choice for about a 100 outlets? Can every single Location be a money spinner? Who is taking that decision for you? And how do you know it is time to close an outlet? As the Boss of your business, you need to have statistics and analytics helping you to measure the ROI of each location and take decisions before they drown the entire business. As a rule of thumb, the poor money makers should not be more than 20% of your total outlets.

4. Less On Menu is High on Profit: Are you having too many lists on your menu?  A QSR menu should  have 5-8 items on the food and Entree menu and around 3-4 on drinks/desserts. Anything more than that will drag your cost down. Even the main dishes should be variations of a single food item. For example, Faaso's differentiates only on the ingredients - it does not deviate from Rolls and serve vada pav. The rule of the game is to stick to just one common base and play around with the rest. Pizza hut literally shot themselves in the foot by launching a briyani which did not gel well with the theme at all. The less menu directly favors your ability to scale and control costs

5. Speed of delivery: Be it in dine eating or door delivery services, QSRs cannot take more than the committed time. Have you computed your delivery times based on the processes that you have established earlier? Can you deliver in that time? What can go wrong and how will you mitigate the risks? Have you found the right logistics, location wise to deliver on time? Enough fleet? Good partners for food delivery? How much is the commission bleeding on delivery? All these have to be factored into your delivery cycle and should translate into customer delight Every time. This makes a big difference in bringing repeat customers to your doorstep.

These 5 elements factored well in a Business Plan along with some good recipe ideas can bring you the much desired VC funding!


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