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Planning to bring US based food business to India? Here’s how to get the job done

Suchayan Mandal | Jul 17, 2017, 12.47PM IST
Quick Service Restaurants in India are growing bullish in India. Thanks to disposable income in urban cities and a penchant for trying out new food, people are flocking to QSRs and helping them grow. With KFC, Five Star Chicken already in place, it's time for US-based restaurant chain Genuine Broaster Chicken to flap its wings.

Founded in 1953, Genuine Broaster Chicken is known for serving pressure fried chicken. It will also offer dishes such as Jong-Lee burger, Happy Fried Chicken and Palangtod.

The brand has tied up with food and beverage franchise management company Yellow Tie Hospitality to enter India and is planning to invest Rs 20 crore in the next two years. With stores in Mumbai, Raipur, Surat , Kolkata, Hyderabad , Patna and Lucknow already operational, the company is planning to expand in Delhi and Benagluru as well.

Of late we have seen a lot of US food chains coming here, right from Carl's Jr to Burger King and thriving well.

Business Insider caught up an exclusive chat with Karan Tanna, Founder and CEO, Yellow Tie Hospitality to understand the dynamics of food business brought from USA.


Does US brands partner with wealthy investors or good operator?

Indian market is a different market and relatively difficult owing to lot of region specific requirements, varied spending powers across demography and very customised food habits of Indians. Now American companies have become very careful on whom they partner with. American companies prefer partnering with a good operator rather than a wealthy investor, which was the case before a couple of decades. American companies want to partner with companies that can bring in their local intellect and capabilities to customise the model keeping the brand philosophy intact. If you have a proven track record and reflect with vision of American brand, they are very open to partner. Nobody would like to miss the growing Indian market.

How to invite an established US brand to India?

Once we start talking to a global brand, we need to share details on our company's background and financial worthiness and bandwidth to get the brand. The next step is to understand the proposed strategy to grow that brand in India followed by a proposed financial model and a roll out plan. Once both, us and the global company are on same platform on strategy and business plan, it is a good time to discuss commercials. After negotiations and signing, it is very important for us to go to the current stores in global market and do hands on training for a few weeks to understand brand better and strategise the roll out for India market. This leads to foundation to start looking for premise for flagship store.


Do you follow the same business model as in USA?


The business model of Franchise is more or less the same. We have territory partners for various territories and sub franchises under them. As a master Franchsie we play the role of "brand" for them and help with back end capabilities like menu engineering , supply chain , marketing and training. The roles are very clearly defined with appropriate investment and returns finances.

The model is almost the same with certain customisation relating to Indian market scenario.
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Karan Tanna (Linkedin)

Does the US brand value make the job easier in India?


Well there is no doubt that it gives a good initial traction due to aspirational value as well as its popularity in global markets. Due to shrinking world, it has become easier to communicate with guests about its global presence. At the same time, guests come with certain expectations and if the brand in India doesn't perform well, it might backfire.


What kind of investments do you need to bring an USA food chain to India?

Depending on the value of brand in global markets, investment could range between Rs 2 crore to Rs 25 crore. it also depends on the format of store and roll out strategy of every brand. It's very specific for each brand.


How do you plan to expand in a competitive Indian market?

We plan to get such brands that are a category creator or leader. It is very important to have a differentiator product with right store level economics for a brand to win over competition and sustain. A good brand positioning and communication and aggressive roll out also gives an edge over other brands. We have built in house capabilities to support such a growth and that will be our strategy to dominate over competition.


Can US brands come directly to India and operate?

American brand can also directly come or they can come through a master Franchsie. There are FDI regulations which have to be take care by any brand to enter india. Usually in food, they want to come with India partner to get regional support and expertise.

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