The Mumbai-headquartered pizza chain Smokin Joes is finalising plans to enter the southern markets of Bangalore, Chennai and Hyderabad through a master franchisee. The 24-outlet chain, operating in seven cities, recently opened an outlet in Delhi with the appointment of a master franchisee for northern India (Punjab, Haryana and Delhi).
Under the new expansion thrust, Smokin Joes will appoint master franchisees for northern and southern markets, who in turn will identify franchisees for the chain. However, for western India, the company will continue to deal directly with pizza-outlet operating franchisees.
As per the new arrangement, Smokin Joes will share one-third of the regional franchisee revenues with its master franchisee. In western India, (including a dozen outlets in Mumbai), Smokin Joes secures royalty of seven per cent from each franchisee outlet.
Says Smokin Joes director Nirmal Momaya: Weve plans to treble our revenues (from targeted Rs 15 crore in 2002-03) and develop a network of 75 outlets in the next couple of years. This can be achieved only when we have partners with strengths in the respective regions and who can mirror our organisations brand image.
He adds: Delhi looks like a bigger market than Mumbai. We feel that our competitive pricing (20-30 per cent cheaper than well-known MNC brands), a national co-advertising tie-up with Pepsi and extensive portfolio of fresh local flavours will give us a reasonable share of the fast-growing pizza market. Were currently working on developing a spicier menu for the southern market.
The company claims that all its franchisee outlets have achieved break-even. Our store-in-store revenue growth has been around 15 per cent since the last three years, says Mr Momaya. Investments per outlet range from Rs 13 lakh to Rs 16 lakh in addition to the property cost, and stores are expected to operationally break-even in six months.
For metros, the company will have outlets occupying a space of 500-800 sqft which can provide 20-30 seats while for towns like Pune and Ahmedabad, it will maintain outlets with space of 800-1,200 sqft which can have 30-40 seats. The larger seating facility in small towns is designed to address consumer preference for dining over home delivery.
In the next two years, the nine-year old chain plans to have a network of 17 outlets in Mumbai (up from 12) and 15 in Delhi.
In the last couple of years pizza retailing in India has received major thrust with new players entering the field. While MNCs like Dominos Pizza have focused on home-delivery in 30-minute model and Pizza Hut offers a dining experience to pizza-eaters (besides a new focus on home-delivery), new entrants like Amul are pushing pizza through small tea corners. As in other global markets, in India too Pizza has witnessed extensive localisation to adapt to local palate Dominos offers local flavours like Peppy Paneer and Chicken Chettinad and Smokin Joes offers Tandoori Paneer and Butter Chicken.