I was driving through the Old Airport Road in Bangalore yesterday and saw that Chili's Bangalore had shut down :-(.
An iconic brand like Chili's shutting down their first unit in India is not a good sign. When I tried to think through what may have gone wrong, the old saying that the Restaurant business is about "Location, Location & Location" came out on top. But the location Chili's had picked was actually not a bad one - just a little inconvenient and not very upmarket. The place was on the main airport road with great visibility, near a busy junction with a number of offices and residences in the neighborhood. Parking was a bit of an issue, even with a valet option available. On top of it, there was a hugely successful TGIF in the same area validating the market potential there. So I am thinking that there is more to the story than just the location.
Chili's today has 7 locations in India - all in malls across Mumbai, Delhi, Pune, Hyderabad & Bangalore. It looks like they have chosen to go the Mall route, like many other restaurant brands. Malls offer some big benefits to restaurant brands - they create and manage infrastructure suited for a restaurant - everything from providing AC points right into the unit, to taking care of power back-up, sewage and water connections, garbage disposal, centralized parking and great visibility options. On top of it, they have a maintenance team that is reasonably responsive to take care of any issues. With a movie theatre thrown in, malls become a weekend destination for families, creating a great captive customer base.
This shift in strategy to move to malls, the operational hassles in a stand-alone unit with the place and a not-so-great business in terms of revenues may have Hope their new strategy works out well for them.