California-based burger chain Carl’s Jr., which is known for its premium-quality charbroiled burgers, is making a foray into the Indian market. CKE Restaurants Holdings, Inc., parent company of Carl’s Jr., has signed an agreement with Cybiz BrightStar Restaurants Pvt Ltd, owned by CybizCorp, to open 100 restaurants in India. CybizCorp will own and operate the restaurants as a master franchise. Ned Lyerly, president (International) at CKE Restaurants spoke to Forbes India. Excerpts:
Q. When will you open your first restaurant in India?
We will be launching in April 2015 with the first five outlets in the National Capital Region and Chandigarh. We expect to open our first outlet either in South Delhi or Central Delhi.
Q. How many outlets are you looking at?
We are looking at opening 100 outlets over 10 years, but it could happen within a shorter time frame as well. Initially, we are looking at tier one cities, but we will eventually move to tier two cities too.
Q. Can you share your investment plans for the India market?
There is a broad range of investment required for a restaurant, which at the lower end, is a quarter to a million for a food court kiosk; for a large, free standing restaurant, it can be over a million dollars. I think a ball park investment figure will be around $50 million for 100 restaurants.
Q. The Indian burger market has seen many new entrants. How do you plan to differentiate yourself from the other players?
We are positioned between low-priced burger players (McDonald’s, KFC, Burger King) and premium burger chains (Fat Burger, Johnny Rockets). We offer the most premium burger you can get in this space, but at the price, value and convenience of a fast food.
While our positioning is to reach the mass consumer base, we won’t be a low-priced provider. It might be priced a bit higher (10-15 percent higher than competition), but you get more value for what we offer. We will add elements that other brands don’t provide. So, we will have an all-you-can-drink beverage bar where you can pay for one beverage and have unlimited quantities of it. The beverages will include soft drinks and beer.
We will offer a modified table system where you can order at the counter, but we will deliver it to your table so that it is more personalised. Our food products are made fresh to order in such a way that it is still a fast service experience. Our typical service time is 3.5 minutes.
Q. Have you been studying the Indian market?
We have been studying the Indian market for quite some time. In general, the organised food service market in India is a $13 billion market. The National Restaurant Association of India has said it will grow by 16-18 percent for the next five years. We have done a lot of consumer research. We have done a number of rounds of product research and are in the final stages of that activity. We feel like we have dialled into an exciting menu which will appeal to local tastes and flavours and to people who want to graduate from what they have eaten at competitors and are willing to experiment with new tastes and flavours.
Q. Have you tweaked the menu for the Indian market considering there is a preference for vegetarian burgers here?
We have spent over two years refining our Indian menu, in particular the vegetarian part of our menu. We will offer chicken and vegetarian burgers. We will have a char grilled vegetarian platform which isn’t available in the market which will have patties made of paneer, soya, different vegetables, etc. There will however be no beef burgers.
Q. Do you offer vegetarian menu outside India? If not, is it something you would consider since you have spent time on designing a vegetarian menu?
We haven't sold vegetarian menu as our primary menu outside India. We understand the importance of the vegetarian market here, so we are looking forward to offering good vegetarian options to people who are bored and tired of the existing options.
We have 300 restaurants in the Middle East where we can take the vegetarian menu.
Q. What is your marketing strategy going to be like?
We have to get our food in people’s mouth and once that is done, it is already sold. We find from our research in the US, China and Mexico that once people try our products, they recognise the difference and give us higher rating for quality, taste and flavour.
We have a ‘made fresh to order’ menu which means your order is made after you place it. You can customise your order as well. If you are on a low carbohydrate diet, you can choose a lettuce-wrapped patty instead of bread. We have the option of fried and grilled burgers. We char-grill a number of our products, so there is no oil or grease.
We will tell people about our char-grilling, fresh food, table service and other unique attributes. Initially we will use a lot of social media to get our name out there and make our presence felt. Our restaurant, when it opens, will be a flagship to our brand and as we go forward, we will also look for tie-ins with local personalities in India that will give additional credibility to the brand.
Q. Have you finalised the local personality yet?
We have not yet finalised the person. We would like to find people who have credibility in the food industry like a celebrity chef. It will be a youthful face for the brand, but a credible face too. If you take Padma Lakshmi who was in our ads in the US, she is known as an international supermodel and is associated with a top chef as well. We are looking for someone on similar lines.
Q. Is India the only country you are entering next year?
We have 3,600 restaurants in 33 countries with sales of $4 billion. We are entering a lot of new countries. Of the 33 countries we are present in, we entered half of them in the last five years. Next year, we will open restaurants in 5-6 new countries, including India, Australia, Yemen, Guatemala and Columbia.