Restaurant franchise company Yellow Tie Hospitality is on track to take its outlet count to 100 by end 2019, apart from expanding its other F&B brands and augmenting its existing portfolio.
IMAGES Retail spoke to Founder and CEO, Yellow Tie Hospitality, Karan Tanna to learn about the company’s aggressive franchise growth plans and its journey ahead.
Tell us about your brand Yellow Tie Hospitality and its journey so far.
Yellow Tie Hospitality is India’s first organized restaurant franchise management company. We grow our restaurant brand portfolio through efficient franchising management that brings sustainability to the brand.Despite being the second most populated country, India doesn't have a single franchise-driven, nationally-grown restaurant brand. This is due to naïve franchise management practices in the industry. Yellow Tie identified this gap and focused on building backend infrastructure to support its growth through franchise management.
We sell franchises to aspiring entrepreneurs after thorough understanding of their backgrounds and interests. We help franchise owners find appropriate sites for their restaurants, do complete fitouts of the site, carry recruitment and training of staff, give the management software to manage checklists and recipes, conduct audits and lead all marketing and branding support so that the franchise simply needs to focus on delivering a last mile customer experience.
We have also developed vendors and a supply chain to supply required raw material at the franchise’s doorstep, which reduces dependency of the franchise owner on outlet-level skilled staff. We also help franchises with all support to increase sales and profits making them sustainable. Yellow Tie charges a one-time fee and recurring royalty for supporting and sharing intellectual properties with franchises.
In the last three years, we have been growing consistently, adding more brands to the portfolio as well as scaling up existing brands and opening outlets in Tier II and III cities. Today, we are quickly racing towards 100 outlets by end 2019.
How many brands do you have under your portfolio? Tell us about the retail presence of each brand in detail.
Yellow Tie Hospitality has 10 brands under its portfolio. These are:
International Brands Genuine Broaster Chicken: This brand is the category leader in pressure fried chicken by the Broaster Company,USA. Format: Casual Dining & QSR Cities (Includes projects in fit-outs): Mumbai, Patna, Kolkata, Hyderabad, Lucknow, Guwahati, Gangtok, Bangalore, Pune, Imphal, Delhi, Bhubaneshwar & Ranchi. Total outlets: 20 Wrapchic – India’s first Indo-Mexican Burrito brand from UK Format: QSR & Kiosk Cities: Chennai Total outlets: 1 Just Falafel – Authentic Lebanese Food brand from Dubai Format: QSR & Kiosk Cities: Pushkar Total outlets: 1 Chachago – Unique Beverages brand from Taiwan Format: QSR & Kiosk
Home Grown Brands Dhadoom – The only QSR offering Global Fusion Street Food Format: Casual Dining, QSR & Kiosk Cities: Mumbai, Pune, Kolkata, Bangalore, Ahmedabad, Surat, Vadodara, Lucknow, Jaipur, Jamshedpur, Gurgaon Total outlets: 25 BB Jaan – Hyderabadi Nizami Cuisine Format: Fine Dine Total outlets: 1 Twist of Tadka – Modern Indian Dining Format: Fine Dine Total outlets: 1 Teddys – Revolutionary Soft Serve Kiosk Concept Format: Kiosk Cities: Mumbai Total Outlets: 1
Incubation Centre Wok This Way – India’s 1st healthy, only vegetarian oriental wok brand Format: Casual Dining, QSR Umraan Regional – India’s 1st QSR offering regional food from different regions of India Format: QSR Cities: Mumbai Total Outlets: 2
All our formats are category leaders or unique in their own positioning, so franchise owners tend to choose us over competition. Besides, our back-end infrastructure is best in the industry with over 50 team members spread across 5 cities of India giving them a support during the life of their business.
How do you see each brand expanding in the coming fiscal?
It is our vision to be the largest restaurant franchise company by 2025. In the coming year 2019-20, our goal for expansion of each brand is as below:
- Genuine Broaster Chicken: 40 outlets - Dhadoom: 75 outlets - Teddy’s: 50 outlets - Just Falafel: 25 outlets - Wrapchic: 20 outlets - Umraan Regional: 20 outlets - Wok This Way: 25 outlets - Chachago: 50 outlets - Twist of Tadka: 5 outlets - BB Jaan: 3 outlets
Over the next years, our main focus is going to be incubating restaurant brands to scale them and looking at investing in 10 such brands by 2020.
We plan to take four of our portfolio brands global before the end of 2019. We want to continue creating value for all of our stakeholders and grow with our stakeholder.
Any plans to introduce new brands?
We will be introducing two new brands: Teddy’s and Chachago.
Teddy’s: Teddy’s is a revolutionary Soft Serve Kiosk concept that requires low cost capital, minimum operations expenses and quick ROI serving modern day flavours like Charcoal, Bubble Gum, Popcorn and more. These will be served in colourful cones sprinkled with exciting toppings like gold and silver dust, edible eyes, chocolate cigars and more.A typical Teddy’s kiosk will be outside a grocery store, crowded high-street, mall, food court, college campus or canteen, corporate building park requiring an area of just 25 sq. ft. and an investment of Rs 5 to 20 lakh.
Chachago: Chachago is a Taiwanese beverage brand known for its aromatic and delicious varieties of Taiwanese milk tea, bubble teas, fruit-infused beverage, cheese-based beverages, milkshakes, and other specialty beverages and desserts. This is the first time the brand is entering India after having established its presence in countries like Taiwan, Canada, Australia, Hongkong, Vietnam, and Philippines. A typical Chachago outlet will be in malls, high-street, and near educational institutions, and will spread over an area of 100 to 500 square feet and investment required is Rs 20 t0 40 lakh.
What is your arrangement with franchise owners? What kind of services do you provide to them?
It’s a franchisor-franchise relationship. We provide licenses to all our franchise owners to operate and support them to manage day-to-day operations. We charge a one-time fee and percentage of sales as monthly royalty from them.
At Yellow Tie, we have a very strong backend infrastructure and provide support to our franchise owners in terms of experienced teams, supply chain and warehousing, R&D centres and a state-of-art turn-key software to manage our franchises.
Right from location and premise search to building their stores, recruitment, training, time-to-time new product introduction, social media and brand marketing everything is managed by us which leaves the franchise owner entrepreneur to focus only on delivering last mile consumer experience.
This entire eco-system and partnership makes the franchise stores and hence the brand sustainable.
Which are the brands that you have invested in? Any plans to invest in any new brands?
Yellow Tie Hospitality has invested in 2 brands namely, Umraan- Serves India regional curries in QSR format. WTW – Serves vegetarian food, offers healthy make your own WOK and has global appeal.
Both the brands have passionate promoters with good experience in the industry and both have established unit level economics. Hence, we chose to invest in these brands and scale it up through franchising.
We are always looking for brands that can take category leadership, scalable formats and led by passionate and professional entrepreneurs.
Any plans to test international waters?
We are looking at a total count of 100 stores by the end of 2019 and by 2020 we are expecting to reach the total count of 200 stores by extending our portfolio to international markets. Our vision is to make multiple national level brands and take Indian brands on global map.
We have taken Chachago rights for Middle Eastern markets in countries like Kuwait, Bahrain, Turkey, Afghanistan and many more. We also plan to grow and invest vastly in UAE markets. We also plan to tap South East Asian market with Wrapchic.
We also have plans to grow our homegrown brands like Dhadoom, BB Jaan, Twist of Tadka in Asia. Our strategy is to spread network in Asia as it is geographically better and the markets in Asia are similar to India and then scale up these brands to western countries.
The vision of Yellow Tie Hospitality is to be a global brand, but we want to plan strategically so that we can grow our brands in a sustainable manner.
How much are you planning to invest to aid the expansion plans of the brand?
At Yellow Tie Hospitality, to aid the expansion plans of all the brands, we are looking forward to investing Rs 2.5 crore, however this investment will be done by franchisees.
Yellow Tie Hospitality will be investing upto Rs 50 lakh. Major investments will be allocated towards the development of infrastructure and fit-outs of the store and these investments will come through franchising.
Elaborate on the future plans of the brand.
Yellow Tie Hospitality is India’s first restaurant franchising company. It has the vision of being India’s and maybe Asia’s biggest restaurant franchise company. We want to build up a portfolio of successful and sustainable brands with the first goal of crossing the milestone of thousand stores. Franchising in India is very naïve, and we want to develop a sustainable franchising organisation which would create an ecosystem to have successful homegrown brands grown across the nation and in international markets as well.
What are the revenue targets for the current and coming fiscal year?
For the current fiscal year, Yellow Tie Hospitality is looking to close at revenue of Rs 20 lakh. The stores under the portfolio of Yellow Tie are expected to clock the revenue of over Rs 80 lakh. The target for next fiscal year for Yellow Tie is to cross the revenue of Rs 50 lakh.