 "Trained manpower is key to success in the service business: Anjan Chatterjee")
A brief history of the enterprise
My wife Suchhanda Chatterjee and I launched our first restaurant Only Fish in 1992 in Mumbai, which was rebranded Oh! Calcutta in 1996. In 1994, the first Mainland China restaurant opened in Sakinaka in Mumbai. Speciality Restaurants was incorporated on December 1, 1999, as a private limited company and it acquired the two existing Mainland China and one Oh! Calcutta restaurants from us. Today, the company runs 95 restaurants and confectioneries under nine brands in 25 cities in India and in Dhaka, Bangladesh.
When and how the idea of a chain developed
The idea of developing a chain took root after the first Mainland China opened in Kolkata in 2000. It was our third restaurant. We realised that Chinese is the second most popular cuisine in India and the potential was huge considering that there were not many quality standalone Chinese restaurants. The brands success in Mumbai, Bangalore and Kolkata proved us right and gave us the confidence needed to operate a number of outlets across various locations.
Key things to keep in mind when venturing beyond the home market
To set up a unit outside ones own territory, it is essential to have in place a corporate structure, with dedicated and passionate team members, and effective control systems and practices. The other important thing in our kind of business is setting up centralised and local (primarily for consumables) supply chain logistics. This requires local ground support for statutory, legal and administrative purposes. It is like setting up a hub-and-spoke model of operation.
Strategy adopted for the expansion
We took the licensing route. We have our own leasehold properties and operate our outlets on the company-owned-and-company-operated (COCO) model. We opted for the limited franchise option at a much later stage, and some of our later stores follow the franchisee-owned-company-operated model. We chose this route because of the nature of our business. As a fine-dining chain, the food and service aspects of our business cannot be mechanised and need to be handled by ourselves to maintain the same standards and experience across all our outlets. We looked at the franchise model only to help in speedy expansions, primarily in the smaller cities, and bridge the gap in the capital required to set up new outlets.
Maintaining quality and consistency in service across locations
The biggest challenge facing the (hospitality) industry today is trained manpower. Therefore, continuous training on the job is of utmost importance if the standards and quality have to be maintained across outlets. Training also involves a process of unlearning before rigorous re-training of the staff in our corporate philosophy and cuisine. Due to the huge gap in demand versus supply, the challenge is to manage attrition as well. The other challenge is maintaining a regular supply of standardised raw materials at the contracted price despite the fluctuating economic situation.
Managing the supply chain
Managing the supply chain is a big challenge because it depends on many factors not within our control, such as the weather, which affects crops, and the overall economic condition, which leads to price fluctuations. So to cope with these, we sign annual price contracts with our vendors, which helps in managing costs efficiently.
Scaling up
In our journey, the economies of scale worked favourably after the 10th unit.
Branding decisions
Word-of-mouth is the best form of advertising for any F&B brand because taste is subjective, but the real satisfaction of having a good meal gets communicated fast. We also used the media after establishing our presence in the major cities. This helped build a strong brand. For a brand with a single, or even a couple of outlets, advertising on television is not feasible because the high costs. We used television only after attaining a certain scale as part of a well thought-out plan. It has paid rich dividends with high recall.
If you had to start over, what would you do differently?
We would have opened our Kolkata units much earlier as the performance of these units are on par with the Mumbai units, in terms of both revenue and profits. Also, we would have had a mix of a casual dining format/ brand (all-day dining targeted at the younger crowd) in each city, along with the fine-dining outlets.
My wife Suchhanda Chatterjee and I launched our first restaurant Only Fish in 1992 in Mumbai, which was rebranded Oh! Calcutta in 1996. In 1994, the first Mainland China restaurant opened in Sakinaka in Mumbai. Speciality Restaurants was incorporated on December 1, 1999, as a private limited company and it acquired the two existing Mainland China and one Oh! Calcutta restaurants from us. Today, the company runs 95 restaurants and confectioneries under nine brands in 25 cities in India and in Dhaka, Bangladesh.
When and how the idea of a chain developed
The idea of developing a chain took root after the first Mainland China opened in Kolkata in 2000. It was our third restaurant. We realised that Chinese is the second most popular cuisine in India and the potential was huge considering that there were not many quality standalone Chinese restaurants. The brands success in Mumbai, Bangalore and Kolkata proved us right and gave us the confidence needed to operate a number of outlets across various locations.
Key things to keep in mind when venturing beyond the home market
To set up a unit outside ones own territory, it is essential to have in place a corporate structure, with dedicated and passionate team members, and effective control systems and practices. The other important thing in our kind of business is setting up centralised and local (primarily for consumables) supply chain logistics. This requires local ground support for statutory, legal and administrative purposes. It is like setting up a hub-and-spoke model of operation.
Strategy adopted for the expansion
We took the licensing route. We have our own leasehold properties and operate our outlets on the company-owned-and-company-operated (COCO) model. We opted for the limited franchise option at a much later stage, and some of our later stores follow the franchisee-owned-company-operated model. We chose this route because of the nature of our business. As a fine-dining chain, the food and service aspects of our business cannot be mechanised and need to be handled by ourselves to maintain the same standards and experience across all our outlets. We looked at the franchise model only to help in speedy expansions, primarily in the smaller cities, and bridge the gap in the capital required to set up new outlets.
Maintaining quality and consistency in service across locations
The biggest challenge facing the (hospitality) industry today is trained manpower. Therefore, continuous training on the job is of utmost importance if the standards and quality have to be maintained across outlets. Training also involves a process of unlearning before rigorous re-training of the staff in our corporate philosophy and cuisine. Due to the huge gap in demand versus supply, the challenge is to manage attrition as well. The other challenge is maintaining a regular supply of standardised raw materials at the contracted price despite the fluctuating economic situation.
Managing the supply chain
Managing the supply chain is a big challenge because it depends on many factors not within our control, such as the weather, which affects crops, and the overall economic condition, which leads to price fluctuations. So to cope with these, we sign annual price contracts with our vendors, which helps in managing costs efficiently.
| 3 things to keep in mind when building a chain |
| Quality Put systems and processes in place and a control mechanism from a central point. The back end of a business is as important as the front end Supply chain Setting up a centralised and local (primarily for consumables) supply chain logistics is very important HR practices Build a dedicated and motivated team. Do not skimp on training, infrastructure and good HR practices |
Scaling up
In our journey, the economies of scale worked favourably after the 10th unit.
Branding decisions
Word-of-mouth is the best form of advertising for any F&B brand because taste is subjective, but the real satisfaction of having a good meal gets communicated fast. We also used the media after establishing our presence in the major cities. This helped build a strong brand. For a brand with a single, or even a couple of outlets, advertising on television is not feasible because the high costs. We used television only after attaining a certain scale as part of a well thought-out plan. It has paid rich dividends with high recall.
If you had to start over, what would you do differently?
We would have opened our Kolkata units much earlier as the performance of these units are on par with the Mumbai units, in terms of both revenue and profits. Also, we would have had a mix of a casual dining format/ brand (all-day dining targeted at the younger crowd) in each city, along with the fine-dining outlets.
Anjan Chatterjee,
founder & Md, Speciality Restaurants