Nirula's Rs 90-crore expansion plan

In its first-ever venture to turn its Delhi brand name into a national one, the Rs 120-crore plus Nirula's Corner House Ltd has chalked out a Rs 90-crore expansion plan to open 120 quick service restaurants by 2006.

It has earmarked a marketing budget of Rs 3 crore towards regional promotional efforts. Besides it will also introduce local flavours in its menu.

"By next year, we are planning to open outlets in top 20 cities with a population of 20 million plus," informs Vikas Atri, technical advisor, Nirula's. The company will take the franchisee route and is currently in the process of appointing master franchisees in Punjab, Rajasthan, Haryana, Chandigarh, Gujarat, UP, MP, Uttaranchal and Maharashtra, invitation notices of which were released in a national daily earlier this week. With the expansion in place, the company hopes to garner sales revenue of Rs 150 crore in the next three years, says Atri.

With increasing competition from multinational brands like Domino's Pizza, Pizza Hut and McDonald's, Nirula's, which opened its first quick service restaurant in 1977, has been witnessing declining sales, a drop from roughly 67 per cent to 20 per cent.

With the growing number of fast-food restaurants, coffee shops and sandwich bars crowding the market, the company is finally taking steps to look for profits elsewhere. What's more the company is taking steps to gear up for the future.

Atri, a former McDonald's executive, was hired two months ago. It has appointed Snowman India, a subsidiary of Mitsubishi Electric, to handle its food supply chain management.

"We feel the timing now is right for expansion. Earlier, the infrastructure and logistics were lacking," says Atri. The company opened 20 restaurants in the national capital region in the last two years to consolidate its presence in its home base.

Currently, the company has 64 outlets "" a mix of restaurants, delivery outlets and ice-cream parlours. Eight months ago, the company launched its condiments division and the products are sold in 1,600 outlets under the Nirula's brand name. Nirula's also owns three 3-star hotels in Delhi, Noida and Panipat with a total of 107 rooms.