In an interactive session with Franchise India, Anjan Chatterjee, Founder and MD, Speciality Restaurants, talk about his journey and his passion.
On the wonderful journey
I am fundamentally a science graduate after which I did catering from the catering school in Calcutta. I then worked with the Taj group of Hotels for one-and-a-half years and then quit them. I wanted to pursue the marketing course because there lay an area of interest for me. I later worked for a publication house. Then dabbled back and started my entrepreneur venture for marketing in advertising agency and we successfully set up campaigns for Ujala, Everest Masala, Yardley, Fair and Handsome, and many more.
Old passions die hard. So I came back to building a small restaurant – a small humble normal shop called Olive Fish. Cooking being my passion, I started calling people. Olive Fish became very popular within 6-8 months. It was difficult to handle it alone so I thought of taking the whole vertical seriously. It started off as a hobby but later I thought of getting professionals who could run the company because the traditional restaurants in India are owner based – when the ‘maalik’ is there food is good when he is not there food suffers. During those days, institutions in restaurants were very less.
So in 1991 and 1992, we researched and did not focus on expansion but looked at a scalable model. We found that there was a dearth of Chinese cuisine available in popular restaurants. So we came up with a proposition of ‘5 star food at non-5 star prices’. Everything resonated about that and we formed a company called Speciality restaurants. Our main idea behind this restaurant was not to do a ‘khichdi’ kind of a restaurant that serves everything. We thought of doing specialised dishes say Chinese, Indian or Bengali or for that matter grill. This was the kind of mission with which we started.
In 1994 we started the journey of Mainland China and the rest is history. Today we are 54 plus restaurants in Mainland China which total around 100 plus. We went through a cycle of equity funding and IPO. Today, although the economy is not in the best of shape, we consolidate in doing many things which are interestingly being covered; just as it is said ‘when the going gets tough, the tough gets going’. At this level we have the leadership stance and we are looking at international expansion in a big way.
We went for franchise model in 2007-2008. The model which started was Franchisee Owned Company Operational (FOCO). Operations were looked after by us and the franchisee invests in real estate. In most successful franchisee operations, like Domino’s or McDonald’s, within India we were able to work with franchisees in a very cooperative manner.
Building and maintaining a restaurant is a very difficult job; however, expansion is very easy. Getting to expand and have consistency in the brand is a very big challenge. Over a period of time of 21 years of experience, I don’t say that we know everything but we started on a path nobody travelled. We went ahead and explored and, today, we surely know what not to do than what to do. This has been a huge experience. We have been able to build a team and the backup team has always been supportive. It is not always that you have institutions built which are absolutely Indian DNA without any foreign collaboration; we have not copied a name from foreign and have kept an original name. From a real estate manager to a housekeeper to a restaurant manager to a chef to a PR man to be doing a bit of marketing advertising – you need to be a holistic person to do this and it is difficult to manage. We were able to institutionalise and got good quality people. When the economy is going low, we know that we should be holding tight because the rules have changed. But we are not stopping our expansion. A franchise brand, like Domino’s or any other brand, can only be in India or Nepal and other places. For us it is the whole world where we can expand.
On the low economic situation
During this period, one needs to be cautious and not over enthusiastic. Valuation is a very dangerous game. Everyone wants a valuation from 1, 2 and 3 and that is dangerous. It is extremely important for the person to be calm and have a concept which is workable, connects with audience, is low on cost, is a trim fatless model and be careful about real estate prices because as economy is going down real estate is going up. So I will warn them to be careful.
On the state of the food service industry in India – food law and food policies
Unlike today, the food laws were not in place earlier. Hygiene conditions were also not the best earlier; today the food policies are well implemented. It is high time that we get conscious about what people eat and how bacteria can be controlled.
On the sustainable initiatives taken to prevent food wastage
Honestly, we do two quantum oriented things. In all our buffets, we instruct people very softly not to fill up plates for wastage. We give intelligent sublimely messages; you can’t be aggressive. We tell them ‘eat what your plate can hold; we can bring you more’. We have been doing a lot of campaigns for this.
If you lose money somebody else can use it; however, food, once wasted, cannot be reused. And people are getting conscious. We have taken a very bold step and, for the first time of fine dining in India, we have introduced large and regular portion. We pursue people with ‘why eat large when you can eat regular’.
On managing brand identity during the economic slowdown
Once you have created a brand, you need to ensure that you deliver that. Brand is not just a logo or an icon; it is an experience that you enhance. We have been working very hard to enhance the brand experience and there is no compromise on that end at this point of time. We may open a little less number of stores, but the brand experience can never be diluted. In fact, we focus more on how we can make customer’s lives even more comfortable and by giving them a delightful customer experience or the ‘wow’ factor.
On investors’s willingness to invest
We have grown over a period of 31 years and we are a cut throat brand. We have been in the IPO also. All these put together we have been able to balance ourselves. I would not say that investors are running, but surely they are interested.
On how a restaurant owner can build a chain
One word is consistency. Create something and replicate the consistency and brand values in a similar manner. You cannot go to one ‘A’ Mainland China to have one kind of food and then go to ‘B’ Mainland China and have another kind of the same food. So it is important to consolidate on that and work on brand consistency for food, service, etc. Thus consistency is the key.
On the challenges faced by a budding entrepreneur while opening a restaurant
Government of India has made sure that an entrepreneur doesn’t open a restaurant; there are at least 31 licenses that one has to procure. If you go to Singapore, there is a one window clearance; they give you a stamp for opening a restaurant and they give it to you across the table. So I ask the government to be sympathetic and empathetic not only in taking service tax from the customer, but ensuring that the young entrepreneurs are given the licenses in a more comfortable manner. This is one big barrier for any restaurateur.
On the challenges faced by a restaurant owner
Besides the internal challenge of operations, business going up and down and consistency, there are external threats of the municipality guy coming in, the health guy coming in, and the liquor license guy coming in and asking for a bribe. So this is a huge challenge to face.
Customer satisfaction is a big challenge and that is what the business is all about. You need to know everything about him; the more you know, the better it is for you.
Everybody who is getting into this industry should think that it is hard work; it is not a glamour show. It is not like rich kids coming in trying to say that ‘hey! Let’s start a restaurant’; it is a real hard work. They have to be mentally alert, have the concentration and have the passion. They should not be half-chefs at heart. It should not be a mockery.