Smaller cities beckon Pizza Corner

Menus and toppings to be tweaked to match local tastes

FMCG MNCs were the first to discover the market potential of the smaller cities. Now Pizza Corner is one of the newest to follow them into these smaller urban centres as the metros get crowded by the likes of Dominos and Pizza Hut.

This home grown fast food chains, which began eight years ago in the north and then shifted its head office to Bangalore to better track the business potential in the south, has 28 outlets. Of these, 23 are company-owned and five are franchisee outlets.

These outlets are in Bangalore and most of the metros, plus Mysore.

The journey into the next tier of cities will take the franchise to Vijayawada and Visakhapatnam in Andhra Pradesh and Coimbatore and Salem in Tamil Nadu.

The outlets in these towns will be franchisee ones. The cost of setting up one of these dine-in outlets will be Rs 35-40 lakh. The promoter will have to pay Rs 8 lakh as franchisee fee, plus 6 per cent of the monthly net sales as royalty.

Four per cent will be spent by Pizza Corner on marketing. It hopes that the franchisees will be able to break-even at the current prices in 36-48 months.

Along with the new geographical thrust, Pizza Corner is tweaking menus and portions. The chain already makes 20 per cent of its revenues at some of its outlets from the sales of its desi pizza.

Now it plans to add more |offerings to suite the pallets in the smaller cities of South India.

The pizza outlet is also making a minor shift in price points and portion sizes. "The consumers in the smaller towns are more price sensitive. Hence we have had to keep their preferences in mind," says Anoop Sequeira, chief executive officer, Pizza Corner.

"We will fine-tune our offerings to the local market needs. We have had to re-engineer our menu, including restricting the pizza toppings to cut costs."

To make sure that the strategy succeeds, Pizza Corner will also take advice and inputs from the local investors (franchisees) to adjust to the market needs," Sequeira adds.

The company hopes to end the current financial year with a gross revenue of about Rs 30 crore and register a growth between 18-24 per cent per outlet.

The Bangkok-based promoter and chairman Fred Mouawad has bought out the 33 per cent stake of ICICI Venture and now controls 95 per cent of the equity.