Quick Service Restaurants

Quick Service Restaurants (QSRs) and to some extent Casual Dining Restaurants (CDRs) are expanding rapidly across the cities and towns of India since the mid-1990s. Double digit growth is projected at least through 2020.

Familiar global brands such as Domino’s Pizza, McDonald’s, Subway, KFC, Pizza Hut, Barista Lavazza and Costa Coffee each have hundreds of locations in India’s top cities. Prominent among home grown chains are Café Coffee Day owned by the venture-funded Amalgamated Bean Coffee Trading Company, Nirula’s, and Goli Vada Pav.

Eating out is a relatively new habit among Indian middle class consumers but is rising fast among urban youth, dual income families and office professionals. A 2014 report by Assocham, a trade group, claimed that Indians now eat out 8 times a month compared to 14 times for Americans.

Several master franchisees have built substantial businesses in India. Publicly listed Noida-based Jubilant Foodworks, part of the Jubilant Bhartia group, has rights for Domino’s and Dunkin Donuts. With 15,000 employees, it is the market leader in the organized pizza market with a ~70% market share in India and over 800 Dominos outlets as of October 2014. Devyani International operates many Pizza Hut, and KFC locations. It also has franchisee rights for Costa Coffee and Swensen’s Ice creams. Westlife Development, via its subsidiary Hardcastle Restaurants runs over 180 McDonald’s locations in Western and Southern India. It plans to double by 2019.

Success in India requires a deep understanding of several factors that make the market unique:

– It pays to localize. McDonald’s offer many vegetarian options, Dunkin’ Donuts sells Indian sweets, and many QSRs offer delivery options to homes and offices.
– Real estate and utility costs are often higher relative to revenue compared to American operations.
– Some ingredients may need to be imported and duties on food products can be high.
– The market is evolving rapidly and the best opportunities may be in sub-categories that don’t even exist yet in India.

India QSR market
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