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.
Chili is one of the popular restaurants and their branch in India was shut down because now at that place, mall will be build. This is really bad news from chili's perspectives.
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Chilli's has opened (about to open) in Phoenix City Mall in Mahadevapura / Whitefield road.
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