Poll Results: Time within which customers expect delivery orders to reach them

The first poll I ran on this blog received 43 responses in about a week. Moving forward I am planning to run a poll every month and collect some emprical data on customer expectations, industry persepctives.

POll 1 Question:
If you order food for home delivery, what is the reasonable time in which you expect the food to be delivered to your home?

Analysis:
Though the sample size is small to make firm conclusions, it is apparent from the above data that 45 minutes is the maximum a restaurant business can take to deliver food to the customer's door-step, after the order has been placed, to create a good customer experience. This is not a easy thing to do consistently, especially during busy times (weekends).

Ammi's Biryani gets INR 40 Cr funding from SAIF Partners

SAIF Partners has just announed a INR 40 Cr investment in Bangalore's Quick Service Food brand "Ammi's Biryani". Ammi's redefined the Biryani space in Bangalore with aggressive and exceptionally well executed marketing and branding - large scale bill-board and road median boards advertising, call centre for customer orders, well designed & attractive store-fronts and of course a great name for their Biryani brand - Ammi's Biryani. Their highly convenient, attractive and hygienic packaging is still their main draw. While critics may still question their business model (central kitchen with simple sales kiosks and delivery), this investment will give a further boost in their arm to expand and build on their brand.

To me Ammi's represents a new breed of startup restaurant brands in India which want to create a brand of global quality and one that can stand right next to the McDonald's and Pizza Huts. The capital investment, operational expenses and the effort that has probably gone into their concept design, central kitchen, experimental stores, overall branding and marketing is significant. It is great to see investors backing such efforts. All the best Ammi's.

Image Sources:
1) http://www.crazeal.com/deals/bangalore/ammi-s-biryani/54158
2) http://halalfoodguideindia.blogspot.in/2012/04/halal-ammis-biryani.html
3) http://www.ammisbiryani.com/our_gallery.aspx
4) http://www.saifpartners.com/

Thanks

I just noticed that the blog has crossed 50,000 Pageviews. A Big Thanks to all of you for taking time out to read what I write and encouraging me with your kind emails & comments, providing the energy required to sustain the momentum with this blog. Thanks.

PS: A Reader just dropped an email telling me that it is also 500 days since I wrote the first post on March 20, 2011. Guess that's a nice coincidence.

Legacy/History associated with Restaurants

Over the last several years, I have been a big fan of restaurant businesses which have a legacy, a history - essentially a story of some sort behind them. I inherently seem to believe that you can convert these into hugely profitable businesses by making some minor tweaks.

During my last visit to Mysore a few days ago, I quickly researched for restaurants in Mysore and found the following to be interesting and checked them out over the weekend:

1) Vinayaka Mylari Hotel - #1 on the Tripadvisor list. Known to serve the best dosas in town.
2) Om Shanti at Hotel Siddartha - Supposedly serves some great meals.
3) Indra's Cafe Paras - A snack joint serving dosas, chaats etc.
4) Guru Sweets - Known for their Mysore Paks

Out of the list, Om Shanti and Indra's Cafe Paras were disappointing. No real specialty, history - just normal joints serving all kinds of food - probably hve become popular simply due to being around for a while and serving consistent food at OK prices.

I found Vinayaka Mylari (Sign board says - Hotel Original Mylari) to be very interesting. They serve one product - a dosa for 20 bucks. The Dosa comes with a veg stuffing (not the normal Potato Masala), but a gooey veg curry, served with a small block of butter and fresh coconut chutney. The dosa in terms of texture is close to the set dosas you get in a lot of places, but the taste is pretty good - soft and fluffy, and very light (very little ghee/oil) . Think of it as the Vidyarthi Bhavan Dosa without the ghee. The place is really small with a few bences and tables and does not appear very clean at first sight (because of the old building and worned out interiors). The interesting part is that the hnd wash area is in the kitchen - so you actually get to see the kitchen. With some minor interior changes, some nice old style painting, uniformed waiters and disposable paper placemats with their story will make this place rock. With the visibility the place is getting on the internet (tripadvisor, lonely planet etc.), the owners can churn this into a huely popular, must visit place in Mysore - especially given the dearth of eating options around.

Guru Sweets is even more interesting - this is a small corner shop at a very busy junction with two window counters for you to order your sweets. Their special Mysore Pak (300 bukcs for a kg) is the hot seller. The shop is loaded with all kinds of sweets, but in the 20 minutes that I watched, 80% of the orders were for their Mysore Pak and 10% for their Son Papdi. They make their Mysore Pak in limited quantitites everyday using ghee made using fresh butter delivered from a village nearby. They are a great business and with probably a small leaflet outlining their story dropped into every box of sweets they pack should do.

If the opportunity presents itself, I would love to buy out places like Hotel Original Mylari, Guru Sweets and similar such businesses in several cities (especially the touristy ones) - make some minor changes to make the customer experience better without taking away the legacy, tom-tom the story, and reap the benefits of their legacy.

Or maybe there is a case of building something like the "Small Hotels of the World" marketing model for such places.

Photos above from:
1) Guru Sweets - http://www.masthmysore.com/specials-mysore-pak-a-sweet-story
2) Hotel Original Mylari - http://thinditheerta.blogspot.in/2012/01/hotel-original-mylari-mysore-restaurant.html

How much Power (Electrical Supply) do you need for a Restaurant?

You obviously need sufficient power supply to ensure that all the electrical appliances in your restaurant are able to function simultaneously. As a general guideline, a typical restaurant will need atleast about 20 KVA power. 1 KVA is approximately equal to .8 KW.

The big power consumers are the following:

1) The Kitchen Exhaust System: The exact power requirement would depend on the motor capacity and the efficiency of the motor used. The capacity (power generated) would depend on whether the blower is kept right next to the exhaust hood in the kitchen or taken all the way to the terrace of the building. Most small restaurants will typically need a 2 HP or a 3 HP motor powering the exhaust system blower. 1 HP is approximately equal to .75 KW and assuming a motor efficiency (this is the efficiency of converting electrical power to mechanical power) of 50%, you will need 1.5 KW for every 1 HP. So a 3 HP motor (the most commonly used motor at restaurants) will need about 5 KVA power. Once running the motor may not consume as much power as the motors need an extra power surge during start-up.

2) Air-Conditioners: Depending on the number and type of ACs you install, you will need to calculate your power requirement. A typical 1.5 Ton Split AC will need about 2 KVA of power supply.

3) Freezers/Chillers/Water Coolers: The exact power requirement for these appliances are typically mentioned in the back of these appliances. As a guideline, most freezers and chillers need about 300-500 KVA of power supply.

4) Mixers, Grinders, Microwaves, Ovens, Electric Stoves, Beaters, Water heaters etc.: These small appliances you will use in the kitchen are large power consumers. Most of them need between 1 KVA and 2 KVA of power. Depending on the items you use in the kitchen, you will need to calculate your power requirements. For a typical restaurant you won't use all of these items at the same time - so can assume you will need about 2-4 KVA for these small kitchen appliances.

5) Lighting, Sign Boards, Billing System etc.: You will notice that most restaurants use low power consuming CFL lights and LEDs. As a guideline, you should budget about 1-1.5 KVA power for all your lighting, fans, sign-boards, computer/billing system and other small electrical stuff in the restaurant. If you use a Neon sign-board, the power needed will be higher (budget an additional .5 KVA atleast) 


Let's now take an example of a 2000 sft air-conditioned restaurant, with 4 split ACs of 1.5 Ton capacity each and a exhaust system with a 3 HP motor. The table below shows the calculation of the total power requirement for this restaurant. You will need to compute the power requirement for your restaurant based on the exact items you will need and will be using.

A 100 Cr Investment Vehicle for Restaurants!!!!

SAIF Partners, a large private equity firm (which invested in Mainland China in 2007 and made a killing on their investment during their IPO a month ago) has just announced a Rs.100 Crore investment vehicle focused on investing and managing a number of quick service and casual dining restaurant chains. I am trying to find more details about this fund and the nature of investments they will be making. Hopefully they will allocate atleast a portion of the funds for early stage investments. But this is great news for Restaurant business entrepreneurs. Hopefully SAIF's moves in this area will prompt other Venture Capitalists to take a more aggressive chance with restaurant investments and work with a longer horizon (7-10 years) for their investments to show results.

Why did Chili's in Old Airport Road, Bangalore, shut down? The Case for operating a Restaurant in a Mall gets stronger

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.