Quick service restaurants or QSRs have witnessed unprecedented growth in the last few years, the stores that promise to put food on your table within minutes, have revolutionized our lives. And it’s not just about the food. In 2021, the industry employed nearly 70 lakh people.
If you’re looking to grow your restaurant business you’re probably considering how and where to make key investments. For businesses also looking for industry expertise, the right network, and strategic advice in areas such as recruitment, marketing, or rollout proposition, private equity investment can be an attractive proposition. Mr. Prateek Chaudhary, Managing partner at Diablo club, Dragonfly Experience & One8 Commune Delhi – Suggests 3 Tips for you to Invest in QSR Chain
Average daily spend (ADS): This is a measure of how much customers are spending on a daily basis in a QSR. QSRs have multiple fixed costs, such as delivery costs, employee salaries, etc. So, if customers are spending more on a daily basis, these fixed costs become easier to manage.
Delivery as a percentage of total orders: This metric has become especially useful since the rise of online food ordering. It is a useful indicator of how much of a restaurant’s business is coming through delivery orders. It is calculated by dividing the number of delivery orders by the total number of orders.
Having a higher number of delivery orders is beneficial for QSR stores. Say the annual revenue of a QSR is Rs 1,000 crore, and it has to pay Rs 200 crore as annual rent as it provides dine-in facilities. However, the orders it receives in its dine-in facilities barely make up for the rent. In addition, it has to incur additional charges to maintain the dine-in store.
Ever expanding opportunity
The QSR sector in the country is expected to be tripled to become Rs 25,000 crore within five years, according to Assocham. This makes the sector a go-to destination for investors. Another factor making the industry attractive is a rise in aspirational class. Currently, almost 50 per cent of Indians eat out at least once every third month and in the metro cities, the average is eight times every month. The average is pretty low in comparison to developed countries like the USA and Brazil where people eat out at a weekly average of 14 and 11 times respectively. So the averages in India are still to improve, making the market even bigger for investors to venture into. However, it is of much importance to focus on a distinctive experience and food quality.
(The author is Mr. Prateek Chaudhary, Managing partner at Diablo club, Dragonfly Experience & One8 Commune Delhi, and the views expressed in this article are his own)
