The Exchanges

Q Has your, was your dad like a career, ah, when did he start cooking? Like, when did this become a profession for him? Journalism and then this?

A Yes. So, you know, he's written many books, and some of these, some of these books, especially Prashad has become like a common stay at Catering colleges and schools. It's, it's literally used as a tool to make people learn cooking. He was never a chef. He was a journalist who simply had a God given palette. And his palette was so sublime that he could work with the great chefs of India and improve recipes. But more than that, he was a historian. He devoted his life to documenting, researching, and then, you know, recording Indian food because unlike French or German or, you know, Japanese, any of these cuisines are fairly well documented. There are standardized recipes. In India, we had this Khansama culture where these really good cooks and chefs want to hide recipes. So the recipes were never documented and they were all over the place. You know, even.

AI assessment note: “He was never a chef. He was a journalist who simply had a God given”

Q a bar on the beach. I know so many of my friends who knew nothing about restaurants, but attempted it because it was some childhood passion or dream of theirs. So this is something to really bear in mind. So the first thing I think we should really arrive at is, Across the board, odds of first restaurant being successful. What do you think is an accurate number? 10%? 20%?

A So is the highest morbidity rate business in the world. 90% around that of restaurants failed within the first year and around 96% within 18 months. And the biggest reason you won't believe is not necessarily lack of passion or getting into it for glamorous reasons. It's undercapitalization. People have money to build a restaurant, but they don't plan for the gestation, right? And the gestation is what can kill you. It can demotivate you. It can make the quality become bad because you don't have money to pay the bills. So you start compromising. And unfortunately that's just the nature. I think this is a passion play restaurants in general. It's not a nine to five. It's a lifestyle choice. You have to get into it for the right reasons.

AI assessment note: “90% around that of restaurants failed within the first year”

Q Supply chain, am I missing anything? Is there a way to negotiate efficiencies in the supply chain? To reduce the cost of goods? Where do you buy supplies from as a restaurant owner?

A Multiple vendors. All of us rely on, Hyper Pure has been started by Zomato that is trying to, you know, become a platform. But at this point in time, the vast majority of restaurants around the country are buying from individual vendors that they've had relationships for years. And it's a good thing. You should encourage this local farmer, local vendor. These guys, the meat supplier, the local butcher, the local farmer, the local vegetable guy, even though he's a consolidator, You know, it goes to the Monday every morning, picks up the stuff, does that effort, does that value add, and then gives it to you. I think that should be supported, but there are now alternatives. There are larger platforms like Hyperpure that are providing a platform.

AI assessment note: “Multiple vendors. All of us rely on, Hyper Pure has been started by Zomato”

Q Main points one needs to keep in mind while opening a restaurant. One big question, location. How do you guys narrow down on location? Because you've all said location, location, location. How do you, what do you use individually to figure out the location?

A I think all of us will have some similar points and some overlaps. Um, I am a little bit old school in this sense when it comes to a restaurant location. A physical offline restaurant location. I would like to visit at least once or multiple times if possible and go with the gut. I do rely on data, but like I said, the data is fairly, ah, you know, it's, it's not really that accurate and it might be stale. It might be stale data that you're getting from these agencies. You should go and see Other restaurants in the area. Absolutely. That's, that's what, that's how you do a site survey. A site survey is a two day exercise. It's not usually a one because you're going to invest five, six, two, three, five, six crore rupees into a restaurant. You should at least give it two days. Makes logical sense. Sit there, put the time in. And I don't think, even though I have a great business development team and people I really trust, uh, and, and, and sometimes, especially for overseas locations, I'm not able to visit. I think it's important if you, especially if you're starting out to spend that time and focus on that.

AI assessment note: “I would like to visit at least once or multiple times if possible and go with the gut.”

Q Do you ever outsource supply, like paying the supplier, ordering all of that?

A In, in, so overseas, we do that. Uh, the entire accounting, for example, in Farsi cafe, London is outsourced because we don't, for one restaurant, we're not going to build a whole finance department. In India, we do it fully internalized. Um, you have to have systems. You, I cannot downplay the importance of, you know, Like I said, it's, it is low barrier to entry, but there are just so many gaps. You have to have dependence on good people, build good culture, perhaps develop a direct relationship with your vendors. So when I say pilferage, I mean, you're, I'm assuming you're saying consumer comes and bills not raised or the vendor is supplying 10 and you're being charged for 12, right? Culture building, um, making sure there are enough audits. We do a bunch of audits, but I think it's more important. You just have to learn, you can't police people for too long.

AI assessment note: “so overseas, we do that... In India, we do it fully internalized.”

Q That brings your cost down from 20 change percent to four, five percent, right? What is the issue with it right now?

A So on this is definitely a very, is a democratization and a commoditization of delivery. Now here's the beauty. There are enough third party aggregators that can responsibly and effectively take your product from your cloud kitchen or your restaurant to the end user. There are enough of them now. They, however, perhaps are not as seamless. Because Magic Pin or Paytm, who have these seller apps on ONDC, are still relying on these third party people. They're not employees of Magic Pin or employees of Paytm, they're third party delivery people. So that extra charge is there, but the way to circumvent that is to be able to charge the consumer. A fee, and I think the fee for three kilometers is 50 rupees. So if you're within three kilometers, you charge 50, it's a little bit more charge 70. I think people, and the advantage is because-

AI assessment note: “They, however, perhaps are not as seamless. Because Magic Pin or Paytm”