Gaurav Jain & Pallavi Gupta, Mast Kalandar: “In 3 years, we’re looking at 100 branches across India.”

The story of Gaurav Jain and Pallavi Gupta reads like a modern-day fairy tale. They chucked plush jobs in the IT sector to start a restaurant called Mast Kalandar, serving authentic, vegetarian North Indian food. Two years ago, we at YourStory had spoken to these entrepreneurs, who also happen to be husband and wife, about their business idea (click here to read that story).Now, after a second round of funding from Helion Venture Partners, we caught up with Gaurav to understand the progress that they’ve made and also, to get some insights on the restaurant business based on their learning.

Tell us about your background, Gaurav. What were the circumstances that led to the conceptualization of the business idea behind Mast Kalandar?

Pallavi (my wife and co-founder) and I were working with a large corporate firm in the IT industry. We were doing very well for ourselves.  We were in position where we couldn’t have asked for more as far as a good career was concerned. But then, we always wanted to do something of our own right from the early days.

Apart from wanting to strike it on our own, we really wanted to be a part of the retail growth story in India, with the sector beginning to open up in early 2000. Both Pallavi and I have some background in retail. Pallavi was, in fact, a retail consultant in the IT industry at that point of time. My entire family was in the retail business and I was exposed to it since childhood. So, we had some sort of inclination towards retail.

We started experimenting with a couple of formats and eventually, settled upon the quick service, casual dining space. The other reason was that when we were working professionals, we always felt the need for this type of food/dining format.

We never got clean, hot and authentic North Indian food in Bangalore easily and when we were travelling abroad for work, we saw this concept of “pre-plated combos” in other cuisines. We started wondering about why no one was doing it in India and we felt that there was a need for such a concept.

In 2009, you had said that you were looking at 3 cities and 25 outlets by the end 2010. Where do those figures stand now? Also, what are the challenges that you’re facing with respect to scalability?

Well, we are in three cities today – Bangalore, Chennai and Hyderabad. We are very close to 25 branches. In fact, we’re just doing our 23^rdbranch. In another 3 years, we want to hit the 100-store mark and turn into a national chain.

With respect to the challenges, we have to understand that no one has tried to build a scalable model around the type of food that we serve, i.e., fresh, healthy and hot North Indian food. There are models for frozen food and fast food. So, we have to address every challenge differently as we grow. Whether it is production, operations or logistics, we have to figure out the best practices for ourselves. This is apart from the regular challenges like recruitment, etc.

The moment that you decide to do frozen food, the challenges are diminished multi-fold. But in our model, we have to make sure that the food is nice and fresh with minimal wastage. There’s also the angle of proper handling. Frozen food, for instance, is much easier to handle.

So, there is a need for us to develop our own standard operating procedures (SOP) and service practices. We have to educate everybody in the company that this is how it has to be done and that’s not always easy.Helion Venture Partners have invested in you. So, what is the sort of value that your investors have brought to the table, apart from the money? How have things changed since the fund infusion?

Actually, we’ve received investment twice. The first round of investment came in from Footprint Ventures and helped us reach the 20-store kind of scale. But with Helion and their expertise coming in, we have started looking at a much bigger scale. So, when we’re recruiting people, we’re hiring very senior people who can handle that 100-store or 200-store level of operations.

When we are devising any process or any menu item, we are looking at the scalability across a larger network. In a way, the business vision has grown much larger.

Right from the time we started, we’ve been developing it with the idea of becoming a national chain. And we’re doing it through small steps. We aren’t going overboard and opening 10 stores a month.  Many others have done that it in the past and have not been able to move ahead properly. We’re taking it forward steadily and that’s helping us grow every moment.

How is it to work together as a husband and wife entrepreneur duo?

Well, there are advantages and disadvantages. And you probably face the entire range of those within the first two to three years of working together. We’ve been working together for more than five years now. Now, we’ve managed to work out the professional and personal equations very well.

But what happens with a husband-wife entrepreneur duo is that there are no boundaries between your personal and professional life. Today, we’ve split duties with respect to Mast Kalandar. Pallavi looks after many of the support functions and backend operations. I take care of the front end and associated functions. But we’re both able to add value into each other’s domain. But initially when we started working, we were also discovering each other as fellow professionals. It takes time to strike that balance and I believe that we have done it well.

I don’t think many people go through this experience. But overall, it’s quite fulfilling.In the food business, supply chain management and inventory management can make or break a venture. How do you manage that and keep costs low?

Like any other business, we’re constantly looking for better ways to tackle this. This is all the more relevant with food prices inflation hitting the roof every now and then. But what we’ve never done is to compromise on the quality.

In 2008, when the recession was hitting and the food prices were going up, we had a really tough time for about three to four months. There were several proposals on the lines of replacing ingredients or changing the standards. But we steered clear from all that, keeping in mind that we had not gotten into the business with the idea of carrying out such steps.

It’s about getting your priorities right. We’ve always believed that compromise on quality was never an option. We deal with a lot of perishable goods. You can’t store milk, curd and vegetables and keep them fresh for long. So, we’ve had to do a lot of planning and forecasting.

Also, from time to time, some items go into short supply. For instance, I remember a time when we had blackouts for butter and ghee. We had to store whatever we could, keeping in mind the shelf life of these products. It’s a constant tussle, really. It’s a full-time task.

We have dedicated people to track all this now. Earlier, it was based on gut feel, instinct and a certain understanding that had built. But since we’re scaling, we can’t do that anymore. We’re investing in a lot of IT and infrastructure to make all this seamless.

What’s the year-on-year growth and turnover that you’re looking at? How many customers are you serving on a daily basis?

We’re looking at a 100% growth, year-on-year. This is something that we have done in the past as well. We’re looking at hitting a turnover of about Rs.50 crores in the next 18-24 months. Typically, we would have about 500-800 customers at each restaurant, each day. In Bangalore, we already have 16 branches. So, the focus will shift to Hyderabad and Chennai now.

Since you intend to be a national chain, do you see your concept of fresh, authentic North Indian food working up north? Considering that it is not divergent from what is prepared in homes there on a daily basis, do you see some challenges there?

Well, this is a question that we think about a lot and the gut feeling is that it will work because the need remains the same. There are a lot of people who don’t have time to cook and they want to go out and eat nice, healthy food.

If you look at places like Gurgaon, Faridabad or Noida apart from core Delhi, there are a lot of models that are already there. For example, you can see the Haldiram and Bikanerwala models with upgraded ambience and service levels. I would say that they are very close to Mast Kalandar, apart from the fact they also do sweets and savouries. So, I would say that it would work and we’re all looking forward to opening a store in the North and observing how it fares.

There’s a lot of glamour associated with being a restauranteur. What advice would you give to young people wanting to open restaurants? Tell us about the best and worst things that you did during your journey with Mast Kalandar?

Yes, it does look like a really glamorous space and a lot of people do seem to want to get into it. But there’s a lot of hard work that goes on behind the scenes. When you’re sitting in the restaurant and you’ve ordered your meal, you seldom appreciate the sort of hard work or even the challenges that are being faced behind the curtains. On top of that, we want the waiter to be smiling and the manager to be courteous and polite.

So, until and unless you have a manic passion to serving customers, you should not get into it. You’ll only be able to sustain if you feel massively proud and happy about serving people good food. All the other things can be taken care of.

We made the typical startup mistake and wasted about a year and a half in doing the support operations and getting the people in place. If I were to start afresh today, I would rather invest in people right at the beginning to take the support functions like HR, payroll, account, etc. from away my head. The wisest thing that we did was to never give up on quality even when we had the pressure of a crisis. That really helped us hold on to customers and today, they vouch for our quality.

We at YourStory wish Gaurav, Pallavi and the entire team at Mast Kalandar all the best. To know more, check outhttp://www.mastkalandar.com/. Also, please do share with us your thoughts on this story. You can write to us at [email protected].

Sriram Mohan | YourStory | 31^st March 2011 | Bangalore