Goli Vada Pav, a leading fast food brand known for its vada pav offerings, in a bid to expand its pan-India presence, is planning to set up 1,000 outlets in the next five years while yearning to reach a mind-boggling figure of 5,000 outlets going forward. Currently, the company is present in 19 states with 350 outlets in 90 cities.
The expansion will initially cover southern parts of India - 100 outlets is the target. However, it has plans to spread across all southern states soon. Venkatesh Iyer, CEO, Goli Vada Pav, explains, “We are presently coming up with 100 outlets which will enable us to gain penetration in the southern states of India like Tamil Nadu, Kerala, Andhra Pradesh, Telangana and Karnataka,” and adds, “We still have a reasonable hold in the state of Karnataka with 100 plus outlets.”
After completing the target for the south, the company will move up north to states such as Rajasthan, Punjab, and West Bengal and eventually cover rest of India. Iyer states, “We have a sorted plan to reach 5,000 outlets zone-wise. We will be targeting south followed by north, west and then east.”
Interestingly, the expansion plans do not entail a funding round because of sufficient internal accruals and most of the business is based on franchise model. Iyer states, “In 2011, Venture East invested Rs 21 crore in the company. Since ours is a profitable company with sufficient internal accruals, for running operations, we don't need to go for another round of funding as of now.”
He adds, “Ours is an asset light model. We don't invest in store opening because we are a franchise-led business, where franchisee pay a certain amount to sign up with Goli Vada Pav and we help them to roll out the store and train the staff including the franchise.”
Iyer offers further details on the franchise model, “The business development team handholds the franchisee to expand their territory and marketing team helps them to gain visibility in their catchment area. A separate team conducts regular audits with the franchisee to tell them how to ramp up their sales.”
According to Iyer, though the Indian food market is mostly unorganised, his ethnic Indian QSR (quick service restaurant) has an organised setup with a team to regulate logistics and manage supply chains. Recently, it has increased its team size to 150 people. Further, it has recruited senior level talent, well experienced in QSR operations, sales and business development.
The company is also particular about “hygiene, taste and cleanliness.” Perhaps the reason why the recent Food and Drug Administration’s (FDA) actions such as collection and testing of food samples for ensuring compliance to food safety law did not affect the company. He adds, “The technology we use at our franchisee is completely safe and we ensure that people get the best products from our outlets.”
On a concluding note, Iyer confirmed that his company had accumulated reasonable profits which led it to the expansion module. He discloses, “Our revenues are currently in the range of Rs 55-60 crore.”
