Bhargav PV says that making Burger Singh accessible to the untapped markets has driven exponential growth
Burger Singh, a homegrown burger chain in the quick service restaurant (QSR) category, is looking to strengthen its offline presence as it aims to cross 300 stores by the end of the current financial year (FY26), its Chief of Staff Bhargav PV told BW Retail World. He added that the international chains will not be able to bring the desi flavour beyond a certain level.
PV highlighted that as the accessibility of fast food or burgers in general has surged in recent years, there has been an increase in the number of people who are exposed to burgers as a cuisine. Even though international chains have been expanding throughout the country, PV noted that penetration in smaller cities is an uphill task due to lower volume and high initial capex. Edited Excerpts:
Even after a decade of operations, people in non-metros still perceive Burger Singh as the Indian version of Burger King. What’s your take on this?
Currently, we are present in more than 80 cities and predominantly these are all tier two, tier three cities. There are many such cities where global burger chains are not present. We also take customer feedback with every order in every store. We did not get any comparison with global burger chains anywhere, or any assumption that this is a substitute for any other international brand. This is because Burger Singh has been positioned as a desi homegrown burger chain right from the start.
If you look at our products, names, kind of flavours that we promote and our branding, all of it is based around the concept that ours is a brand based on Indian taste. The international chains will not be able to bring that desi flavour beyond a certain level. We have started from scratch to be an Indian flavour burger chain that reflects in everything that the brand does. Hence, there has never been such a comparison
Talking about Indian consumers, how have their tastes and preferences evolved over the years from your perspective?
Probably like a decade or so earlier, fast food or burgers in general were not this accessible. Whichever brands were present, they were present in limited locations. So, the exposure to such food was limited. But now there is a very high penetration, which has led to an increase in the number of people who are exposed to burgers as a cuisine. First, they get used to that product and then over a while, that product becomes a meal also.
The frequency also keeps increasing because of this. Due to this, the international chains, in burger specifically, expanded all over India into many metro cities. However, the international chains could not penetrate into these smaller cities because there is not enough volume and the initial capex is a lot higher. That is where we got the right market fit.
If we identify that there is a problem in the market where people want to eat this, but the product is not accessible in tier two, three and four cities. That is where our chain got that exponential growth because we started targeting those cities.
How do you select new locations? What challenges do you face while expanding into tier two and three cities?
Most of the burger chains, or actually all of them, run on a company-owned, company-operated model. We predominantly run on a franchisee-owned, franchisee-operated model. So, the first thing that we see when we are expanding is, where is this franchisee’s interest coming from? Where are people ready to invest in the brand? Once we get a sense of that, we get an idea that we are getting more interest from this particular city in this particular state.
We get an idea that these are our next targets where we want to grow. In that, we start scouting for locations. We also ask our interested franchises to look for locations in parallel. The location should be such that our unit economics should fit in. It should have very good visibility and accessibility. In tier three and four cities, usually, there is only one or two market where everything is available.
For example, if my consumer base is between 18 to 30, whether there are universities, schools, or colleges nearby. How many office spaces are there? We do a lot of analysis, and then we decide on a particular location.
How are metros performing for your brand as compared to the non-metros? Can you provide a sales breakup?
I will not get into particular sales of metro or non-metro. Generally, in a metro city, your rentals and payrolls are higher, but then the amount of sales that you drive out of an outlet is also higher, just because there is more population density in metros. All of these are slightly lower in non-metros. So, my rental is a little less as payroll is slightly lower because there are not many brands competing for the same individual.
These overheads are slightly lower because of which in the lower sales, my store makes the same amount of EBITDA. Whether it is metro or non-metro, is my store profitable or not? That is the criterion that we look at when we are opening any store. This store has to be profitable, has to make money for the investor and then for the brand.
Since you have around 180 outlets, what is the number that you want to reach by this particular fiscal year, as well as the next 2 to 3 years?
By the end of this year, we are trying to target at least an upward of around 300 stores. Afterwards, we want to add around 150 to 200 stores every year. We do not go by revenue expectation as such. We have a store count as a target that we have to make so many stores. If we have to go to this many stores, then what we need to do is what we plan for.
What would be the same store sales growth right now?
Because we are a franchisee model, we do not look at same-store sales growth as a metric. What we rather look at is like for like. For example, how much is my sale in a region and in comparison, what is the sale in that region? Is it increasing or is it stagnant? I look at how much is the profitability of my franchisee. Is it increasing or is it stagnant? These are some metrics that we look at because our model is slightly different from others.
We are seeing burgers getting priced at Rs 39 nowadays. As consumers feel a bit hesitant when something gets much cheaper, do you think it is manageable to remain at a standard quality level across outlets, especially when you are adopting a franchisee model?
Our franchisee model is slightly different. Most of our time and effort go into auditing and monitoring the franchisees. We have a lot of tools and mechanisms to make sure franchisees are providing the level of hygiene and standard that we expect from a company-owned-company-operated store. We do everyday CCTV audits as well as mystery audits.
We have our operations guy visiting the store every few days to see how the team is performing. There are a lot of checks and balances that we have built within our system, within the franchisee model. Most franchisees do not succeed only because they are not following any guidelines or they do not have this monitoring and audit function properly working. We built that from day one when we started our franchisee model.
How is Burger Singh improving its game on the sustainability front?
One way of making sure things are sustainable is to ensure there is no wastage. With QSR, there is a lot of wastage that happens at all levels. Be it electricity or food. Like whatever oil is used in our store, we send it out for recycling. Whatever food is wasted during preparation, we closely monitor how much of it is getting wasted at a store level and make sure it is getting reduced month on month.
Our used cooking oil is collected and repurposed into biofuel through government-authorised partners. These practices are built into our operating SOPs across the country.
What is that one mistake or one thing that most people get it wrong when they enter the QSR segment, especially nowadays?
Firstly, when anyone wants to enter the restaurant industry, they probably think that it is easy. We will start our own restaurant with any name or any cuisine and make money out of it. What they fail to realise is that there are a lot of moving parts, dynamic things that are within this particular restaurant industry. Like, for example, where to open the store. That is not something a lot of people actually think of. A lot of people can think that I already have a shop, I will open a restaurant in it. But it is possible that the particular shop that they already have is not the ideal location for a restaurant.
Second, they do not study the industry, where is the industry growing? In which cuisine is the industry growing more? They do not know how the third-party aggregators function? What are the challenges that they might face? To run a successful restaurant or a successful brand, whatever things are needed, a lot of people miss out on a lot of things when they are opening a restaurant by themselves.
