JSM plans expansion of Hard Rock Cafe, California Pizza Kitchen chains

JSM is also working on a new menu for Hard Rock Cafe

JSM Corp, master franchisee of international casual dining brands such as Hard Rock Cafe (HRC), California Pizza Kitchen (CPK), Shiro, Asilo, and Tsuki, is rustling up a fresh menu after two years of losses and shutdowns amid high operating costs. 

According to its plan, JSM will add four-five HRC outlets over the next two years and expand the number of CPKs through a joint venture. The company will open more outlets for its fine dining restaurants. “The focus in 2019 will be to grow organically," Sanjay Mahtani, founder and managing director, JSM, told Business Standard. "Between 2019 and 2021, we have a very robust growth plan for HRC as a brand." But the growth for HRC and other brands will be a structured one, in a manner that there is no pressure on the management or the team. There are seven HRCs in India - one each in Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Pune, and Kolkata.

The past two years have been rather tumultuous for the Mumbai-based firm. High operating costs and mounting losses forced the firm to close down four CPK outlets last year. It is now in the process of re-opening them. 

In October, owing to several restrictions by the land lord (Wadia Group) and a skyrocketing rent, JSM had to shut its 14-year-old flagship HRC outlet on the Bombay Dyeing premises in Worli in South Mumbai. It plans to relocate the outlet to another site in Worli by May next year.

In December 2017, JSM saw changes in ownership. Following the exit of Premji Invest, which had pumped in $25 million for an initial 22 per cent in 2012, realtor Jitendra Virwani and promoter Embassy Group checked into the company buying out over 60 per cent from Pemji and Jay Singh, one of the co-founders. 

Mahtani, who had founded the company with Singh and Virwani, owns 97 per cent into the company.  "After Embassy came in, the focus has been to clean up and consolidate," said Mahtani, adding that it went through a series of "bad luck and bad decisions. They (Embassy) have been a great partner," he added. 

Reopening the HRC in Worli tops Mahtani's list. Coming up in Worli, not far from the earlier outlet, the new HRC will boast of a similar 5,000 square feet area in a prime location that gives the brand a better visibility. 

JSM is also working on a new menu for HRC. It plans to introduce smaller portions at a cheaper price for those looking for a quick drink and small snack. This will be in addition to the more expensive large portions it offers in line with HRC's menu globally. It will also have premium priced gourmet dishes on offer.

Also in the works is an expansion for CPK, which Mahtani believes is an "understated" brand in India. JSM is re-establishing that brand on a smaller floor plate. It was earlier on 4,000 to 5,000 square feet, which is too big for boutique pizza space. The new outlets will not be bigger than 2,500 square feet as part of a strategy to move away from a very high rent models. 

JSM is signing up for four new outlets - two each in Bengaluru and Mumbai, which are expected to be operational by the first half of next year. If the smaller format outlets succeed, through a combination of joint venture and JSM-owned outlets, around 50 to 60 new outlets of CPK will come up in the next five to seven years, said Mahtani, adding he has multiple offers for JVs. 

The company's approach for the fine dining brands Shiro, Asilo, and Tsuki will be a calibrated one and the company may not open more than one or two in a year. Asilo and Tsuki have one outlet each in Mumbai. Shiro has two - one each in Bengaluru and Mumbai. A second outlet for Shiro will come up in Bengaluru. 

India's food services industry will be worth Rs 4.98 trillion by 2021, according to a 2016 report by the National Restaurant Association of India (NRAI). The size of the total market, both organised and unorganised, was Rs 3.09 trillion in 2016. The estimates take into account a 10% compound annual growth rate. 

According to the industry lobby group, the restaurant sector is expected to contribute about 2.1 per cent to the country's total gross domestic product by 2021.