McDonald’s and Domino’s were one of the first brands to set up the global market trend in India in 1990s inviting many international brands to India. With same replica model, strategy and product portfolio many of them are struggling in the Indian market even after spending 5-7 years in the country. Papa John’s is already out of India closing its door in the country. The brand was failing to meet the store level EBITDA for more than a year focusing more on brand building, shared two people available about the inside story to Restaurant India. News is also brewing that the promoters of barbeque Nation which has bought the master franchise rights for American burger chain Johnny Rockets in 2016 to replicate their casual dining model at the burger space are unhappy with the performance of the brand in the segment.
Likewise, JSM which owned Hard Rock, California Pizza Kitchen and Shiro struggled in recent past. And recently it sold its majority of the stake to property developer Jitu Virwani who now owns around 62 per cent in the company along with Sanjay Mahtani one of the co-founder and few investors. Seeing all these untold stories the question still remains the same; why these brands failed despite of the fact that they were running on the same model which made brands like Domino’s, McDonald’s, Pizza Hut and KFC flourish in Indian market.
From the first store in 1996 in Mumbai to 265 stores across South and West India in 2017, McDonald’s has come a long way with an immense learning and evolving with the consumers. “The key to our success is the fact that we became locally relevant to the people in India,” points Amit Jatia, who introduced McAloo Tikki to Dosa Masala Brioche to Chatpata Naan- Indianising them to stay ahead of the curve. With more than 400 stores operational in India Pizza Hut knows how to keep customers happy maintaining the quality food and value for money pricing. “We are the first brand to engage with consumers by way of signature writings on the bills – our servers write down personal experiences they have had with the customers on bills,” shared Unnat Varma, MD, Pizza Hut India subcontinent earlier talking to RI media.
And, this gives an answer to many unsolved mysteries of the brands who are trying to get Indian customers on their platter; they are lagging behind in customer satisfaction. Though, they have replicated the model of the top brands they couldn’t sail through because of their product line (too much to offer with no signature product), mistaken concept and uniqueness that drives customers’ to their outlets. Many a times brands also fail to cater to the right audience. According to expert localisation helps but people should not rely on it. A dosa burger would not work in South India because customers’ already have many options to their regional food, similarly butter chicken pizza may not work in North Indian market.
Johnny Rockets, Hardrock Cafe, Shiro aren’t the only foreign brand that got its India plan wrong in the last few years. Over 650 QSR and café outlets shut down between 2013 and 2016 in India, according to a study done by Tag-Taste, an online community for food professionals. The survey covered 2,050 outlets in all formats across the country between last November and May.
The sombre mood of the restaurant industry is reflected with the result that these brands are facing. Reckless expansion, no product standardization, management conflict and undefined territory and audience are few learning lessons for brands that are venturing into the Indian market soon.