Monday, February 29, 2016

Book Launch: "Start Up your Restaurant" and an interactive learning session on the Art & Science of Running Restaurants

You are cordially invited for the launch of our book "Start Up your Restaurant" and an interactive learning session on the Art & Science of Running Restaurants with Manu Chandra, Chef & Partner, Toast & Tonic, Monkey Bar, Fatty Bao and Executive Chef, Olive Beach.

When: 6 PM to 8 PM, Friday, March 4
Venue: NUMA, Church Street, Above Social Bar & Pub, Opposite Empire Hotel.

Tuesday, February 16, 2016

Here’s the book you’ve been waiting for

It is inspired and encouraged by the immense interest this blog generated that we set out to write ‘Start Up Your Restaurant.’ The definitive guide for everyone who dreams of owning a restaurant, we’ve taken every effort to ensure it’s the one book aspiring restaurateurs will need to read.
It’s a step-by-step guide through the entire process – from exploring concepts, drawing up a business plan, funding, choosing a location, planning the interiors and kitchen, arranging supplies, creating a menu and executing food orders, hiring, getting licences and approvals, marketing, launching and operating.
This easy-to-read book also contains stories of restaurateurs who’ve made it big and their mantras for success. Whether starting your own restaurant is your big dream or you want to run your existing food business better, you’ll find huge value in this book.
Start Up Your Restaurant, published by Harper Collins, is now available for pre-order on Amazon. To get your copy, click here.
You can also buy it on Flipkart, Snapdeal, uRead or Infibeam

Monday, February 15, 2016

The Plastic Carry Bag and related ban in Bangalore - Impact on restaurants

Over the last few weeks, several localities in Bangalore have started banning plastic carry bags. The BBMP (Bruhat Bengaluru Municipal Palike) has been setting up meetings with retailers and food businesses advising them of the ban. It looks like the ban will come into full effect from Feb 27, 2015. How will this impact the restaurant business?

Businesses with an active take-away and home delivery business:
1) You will have to start using woven cloth-like bags. These cost almost the same as the plastic carry bags and all the packaging vendors have started stocking these.

Through some research into these woven cloth-like bags I learnt that even these bags contain plastic.There are 2 variants of these bags - Virgin and Non-Virgin. The Non-virgin ones are the cheaper option and contain plastic. The virgin ones are made with cloth and are more expensive. I don't expect BBMP to enforce this differentiation atleast in the short run.

A question: Banning plastic bags should really mean banning several products available in gorcery stores like rice, dal, biscuits etc. I assume the BBMP crack-down is focused on only the carry bags to carry all the other stuff that anyway come in plastic bags. While any reduction in plastic is a welcome move, for real impact, the government needs to go to the heart of the plastic consumption zone - the FMCG companies. Guess that will have to wait for now.  

2) Plastic & Aluminium Foil containers -  These are the containers in which is actually packed by the restaurants. These can be used for now.

3) Pouches - Plastic and aluminium: These are the small thin plastic and silver foil pouches in which restaurants pack side dishes (sambar, chutney etc.), condiments etc. Several restaurants use these to pack the actual food too (e.g. Biryanis). All of these can no longer be used. This will probably be the biggest impact to restaurant and food businesses.  The pouches are cheap, very convenient to pack and are leak proof when tied with a thread or rubber band. Plastic container alternatives to these are expensive (over Rs.2 per container) and are prone to leaks. There are thicker aluminium foil pouches too available which can be used, but these again are expensive. To put this in perspective, bakeries will no longer be able to pack bread in the transparent plastic foils. Not sure how practical the enforcement of this can be.

4) Cling wrap and aluminium foil:
Plastic cling wraps can no longer be used. Aluminium foil rolls can be used. Plastic cling wraps are the cheapest and easiest way to cover food containers. Without these, the cost of using aluminium foil will be prohibitive. Every restaurant uses cling wraps extensively to store pre-cooked ingredients and pre-processed foods. These are used only in the kitchen so may not catch the attention of the BBMP officials when they come to inspect. But technically, usage of any of these will make business liable to pay fines and even have their licenses canceled for non-compliance.

While reducing plastic usage is a good thing, I feel that the BBMP is taking a measure that significantly affects small & local retail businesses, but ignores the larger problem of FMCGs and large companies using plastic extensively. Infact without the simple plastic bags, small retailers will find it difficult to sell loose products (e.g. rice, sugar etc.) which are cheaper for the consumers and the margins are better for the retailer. They will now have to sell branded pre-packaged products which anyway come in plastic bags (except that they look nicer and have branding on them).

For the restaurant business, this will be a pain to deal with. The biggest pain will be felt by the street food vendors and low cost food joints who extensively use the low cost pouches. For others, not being able to use cling wrap in the kitchen will be an operational problem. They will slowly have to get used to container with lids. 

Monday, February 1, 2016

Service Tax - Applicability for Restaurants

The cloud over the applicability of service tax in restaurants seems to have finally passed and clarity has now emerged.

1) Service Tax of 14% is applicable only for dine-in bills at restaurants which are air-conditioned. The 14% needs to be levied on 40% of the bill value.
2) Service Tax is not applicable for take-aways and home deliveries; This is the final resolution and the one that was causing the most confusion
3) If a restaurant levies service charge, the full 14% service tax is applicable on the service charge component of the bill.
4) Input credits for service tax can only be off-set against the revenue component on which service tax has been collected. E.g. If a restaurant is paying service tax on the rental, say 14% on Rs. 1 lakh per month, the Rs.14,000 service tax can be off-set only against the service tax collected on the dine-in component of the revenues. i.e. if 50% of the revenues of the restaurant are from dine-in, then only 50% of the input credit (i.e. Rs.7,000 can be offset).
5) Service tax will not be applicable for non-AC restaurants.

Item 4 above is the most complicated rule to follow for restaurants and needs careful computation by your accountant.