K Hospitality executes expansion in India and outside amid Omicron wave

Plans to double number of restaurant outlets to 1,000 in next five years; will take Copper Chimney, Bombay Brasserie brands to Gulf markets via franchise route

At a time when most restaurants are busy figuring out the survival strategy amid the Omicron wave and have shelved expansion, K Hospitality Corp, the owner of Bombay Brasserie, Copper Chimney, The Irish House, Blue Sea Banquets & Caterers, GVK Lounge, Punkah House, Pavitra Catering,  brands is busy executing an expansion plan, ramping up the newly launched QSR (quick service restaurant) brand and coming up with cloud kitchens in areas where it doesn’t have a presence.

 The 49-year old firm plans to double the number of restaurant outlets to 1000 in the next five years. This will also include taking Copper Chimney and Bombay Brasserie brands to Middle Eastern markets via the franchise route. 

To be sure, the first two waves of pandemic crippled restaurants badly and forced many of them to shut shops.  High fixed overheads, expected restrictions on operating hours, revised social distancing norms and reduced capacity utilization, any drop in consumer sentiments can be catastrophic for the sector, said National Restaurant Association (NRA) in a recent statement. Close to 25 percent of food business operators shut down permanently and nearly 2.4 million jobs lost after the first two waves of the pandemic.

What gives the food and beverage group to expand amid the adversities? “We do believe that coming out of this crisis will be one of the best years for the industry. We see a lot of opportunities coming up and pent up demand from the consumers. So we are really gearing and scaling to capture that demand,” Karan Kapur, executive director --K Hospitality, told Business Standard.

 He concedes the pandemic, like the rest of the restaurant chains, has impacted K Hospitality too but a presence across various consumer touch points have helped the firm navigate the unprecedented. For the aforesaid expansion, K Hospitality plans to invest Rs200 crore through a mix of internal accruals and debt.

“We are present across multiple consumer touch points-- malls, food court, banquets. Having studied the consumer behavior, we have tweaked our business model and made it more delivery- centric and have seen good results,” said Kapur, adding that being in the business for almost five decades has made the company learn from mistakes and adapt to changes quickly. K Hospitality like the rest of the restaurant firms had to “take some tough calls” and let go of people during the first wave.

In its 49th year of business, last calendar year, the firm added 40 outlets which are in various stages of becoming operational. Couple of months ago, it also launched a new Indian QSR brand christened Joshh which presently has six outlets and is in the ramp up stage now. A persistent trend of work from home will influence the choice of location for expansion of restaurant brands and unlike the past the companies will consider residential areas in comparison to business and commercial hubs for setting up new outlets, said Kapur.

Meanwhile, the food and beverage group has also been adding cloud kitchens in underserved areas.  As of now, it has 10 such kitchens and more are in the works. Even as the expansion is underway in the domestic market, efforts are underway to take K Hospitality brands outside India. The firm has recently won a contract for an outlet at airports in Malaysia. It is also in talks with a partner to have Copper Chimney restaurants across the Middle Eastern region.Close to 95 per cent outlets in India are owned and operated by the company but for international expansion the brand will also be exploring Franchise route."  Also, a few months ago, under new business vertical, Fire Foods Africa, K Hospitality entered Africa with exclusive franchise rights for Domino’s Pizza in Ghana.

THE GAMEPLAN

• To double the number of outlets to 1,000 in 5 years

• Has outlined an investment of Rs 200 crore for expansion

• Will raise funds through a mix of internal accruals and debt

• Won a contract for an outlet at a Malaysian airport

• In talks with a partner to set up Copper Chimney restaurants across Middle East