Adding more links to the chain
20 Feb 2001
The Rs. 24-crore equity-based Pizza Corner, owning 25 outlets, plans to add another 16 regular ones by this year-end. The company has two formats – dine-in and delivery outlets.
According to Mr. Bakhache, a dine-in restaurant would need an investment of Rs. 80 lakh, while a delivery outlet would cost half of that. "As a company, we will break even on opening our 29th outlet," he adds, while exuding confidence that the chain will close the year with a turnover of Rs. 23 crore.
In order to expand their network fast but at a lower capex, Pizza Corner and Domino's Pizza are opening smaller outlets in places frequented by high net worth families.
Pizza Corner is setting up what it calls ‘Pizza Corner Express’ outlets – an 11 ft x 11 ft outlet manned by two persons to deliver pizzas in less than five minutes. The outlay for each outlet will be in the range of Rs. 7 lakh. Similar outlets are planned along the highways. As per plans, the company plans to open 100 such outlets in three years.
On
its part the country's largest pizza chain, Domino's Pizza
is planning to add more outlets to its existing 100. The
company has tied up with the Indian Oil Corporation (IOC)
to set up pizza outlets in the latter's petrol bunks and
in the process save on real estate costs.
The pizza chain will open such drive-in-drive-out outlets
in around 100 IOC petrol stations in 16 different cities.
It intends to invest around Rs. 40 crore to expand its
network.
"We have tied up with a real estate consultancy firm,
C. B. Richard Ellis, to locate space for opening outlets",
remarks Mr. Pavan Bhatia, chief executive officer of Domino's
Pizza. The opening of outlets in petrol bunks has made
the company to revise its current year turnover target
from Rs. 72 crore to Rs.100 crore.
In addition to domestic expansion, Domino's Pizza, according
to Mr. Bhatia, will be floating two wholly-owned subsidiaries
in Bangladesh and Sri Lanka with an investment of around
$ 4 million.
While Domino's Pizza follows the concept of own outlets
– except the one in Coimbatore belonging to a franchisee
– Pizza Corner, apart from owned ones, has around
six franchisees.
However,
the first entrant, Tricon Restaurants, which owns the
world's largest pizza chain, Pizza Hut (around 12,500
restaurants in 90 countries), is surprisingly slow in
its Indian operations despite its head start in the sub-continent.
The company also owns two other popular chains, Kentucky
Fired Chicken (KFC) and Taco Bell, which dishes out Mexican
fare.
It may be recalled that Tricon Restaurants' earlier fast
food venture, KFC, got mired in controversies. With the
two other pizza chains making good money selling pizzas,
Tricon Restaurants decided to focus its attention on Pizza
Hut.
However, unlike the other chains, Tricon Restaurants follows
the franchisee model to spread its pizza brand in the
country. The company has so far opened 18 Pizza Hut outlets
in nine cities and has plans to open 30 more by this year-end
and 80-100 more in the next three years.
On its part,
Tricon Restaurants involves itself actively with its franchisee
while getting six per cent of the latter's turnover as
brand royalty. "We invest in supply chain, marketing
and training of franchisees' personnel," explains
Mr. Pankaj Batra, senior marketing manager, Indian sub-continent.
With a presence in all the major cities, Pizza Hut is
conspicuous by its absence in Mumbai. But the chain has
plans for Mumbai too. Mr. Batra, says, "We will open
our first restaurant in Mumbai this year. The city has
the potential to have at least 30 outlets. In the next
fifteen months, we will have about 10 outlets there."
The franchisee for Mumbai city is Wybridge Holdings, Indonesia,
and housing finance major, HDFC has a small stake in the
franchisee company.