Round Table Pizza – a leading American pizza chain with over 500 restaurants in 9 western states and 5 foreign countries – will be opening a chain of restaurants in India. The company has signed an exclusive agreement with South Asian Hospitality Services to open 50 restaurants in the country.
Mike Buck, Senior Director International Operations, Round Table Pizza and Pradeep Sehgal, CEO – South Asian Hospitality Services (SAHS) share their India plans with Juhi Sharma
What marked your decision to foray into the Indian market?
Mike Buck: Post our recovery from the economic crisis that had hit US and a lot of other countries, we have been able to stabilise our business over the last two-three years. But at the same time we realised that growth in the US is going to be stagnant, and decided to explore new markets which were growing markets and where our brand would perform well. So we selected markets such as India, besides some South East Asian and GCC countries. As per our research into these markets, we learnt that the demographic profile of these regions is growing upwards, with people upgrading their lifestyles, and leading to changes in consumption pattern. These changes will favour our brand. In India, even though there are other pizza brands, we feel there is room for a brand like ours whose offerings are unmatched in terms of quality.
When will the first outlet open?
Pradeep Sehgal: Initially, we will open around 5-7 outlets in some major cities in prime locations. In the first phase, we will be targeting cities such as Delhi-NCR, Mumbai and Chandigarh. The first store is expected to come up between September and December this year in Delhi; we are currently identifying potential locations. The second outlet would open in Gurgaon in the NCR, and simultaneously we are chalking out plans for the third store and looking for locations in Mumbai, following which we will open the fourth outlet in Chandigarh. By the end of this fiscal year, three outlets should be operational. We have identified these cities based on our observation of the consumer profile.
As regards locations, we prefer to be in a mall, as malls offer good visibility due to higher footfalls, and the right kind of customers for our products. But we are open to high streets as well but a mall would be our first preference. In America, the Round Table Pizza outlets are large formats, but in India, going by the high rentals and real estate
costs, we would opt for1,200-1,500 sqft areas.
What is your strategy for the Indian market?
Buck: Approximately 80 percent of Round Table Pizza’s businesses are owned and operated by franchisees. South Asian Hospitality Services, our master franchisee partner for the Indian market, will help us expand in the country, initially, by launching and operating stores themselves, and later by hiring sub-franchisees for rapid expansion across the country. Our master franchisee agreement is not yet finalised and we have just signed a letter of intent. The commercials of the agreement are still being worked out. We are working in the same way in other markets as well. Signing a franchisee partner helps in gaining insight and foothold into new markets, which facilitate smooth establishment, and start up of the store operations.
Sehgal: The human resource will be recruited from India. To understand Round Table Pizza’s restaurant format, we will send a team to the US for three months training, who will then induct the staff in India. However, we expect that the parent company will be responsible for the opening of the first two to three outlets.
How do you select a franchise partner?
Buck: Our marketing department helps us in identifying the potential business partners across the globe. We look for business partners with a strong foothold in the market and their understanding of the dynamics of the food business. Their business values, ideas, and ethics should be compatible with ours, but it’s not necessary that they are from the same industry. For instance, we have signed a franchise agreement with a company in Pakistan, which is primarily into gas and oil, and do not have an F&B background. However, they have strong business acumen, and are expanding their business portfolio into a food vertical. So, we chose them over others. In case of SAHS, they are an established company in the restaurant management business, which would give us an edge in the Indian market.
In case of sub-franchisees, we will study their business standing, brand image, market share
, and growth potential.
How will you position your brand?
Buck: Our tag line globally is ‘The Last Honest Pizza’ and we want to instill this in the minds of our Indian customers as well. We will position ourselves such that while our appeal would lie in being premium, we will cater to the same segment as our competitors. Even though our offerings will score on the quality of our ingredients and preparation style, unlike other pizza chains, our pizza crust will be baked in-house. Our pricing will be the same as the other brands. Initially, we will introduce promotional offers. However, I feel that communicating a new brand in India is a challenge.
Will you customise your menu for the Indian market?
Buck: Our menu will offer a range that will suit everyone’s wallet and taste. We will introduce some of our signature pizzas along with pizzas with Indian flavours and some customisation as well. For instance, our popular King Aurther pizza, which is a combination pizza, and is largest selling in US and Dubai, would not translate well in India. But our chicken and garlic gourmet pizza would do well here. We will have an Indian line of gourmet pizzas as well. We will also look at some of our pizzas that are performing well internationally, and which can become popular in India too with a little customisation.