'Sagar Ratna' is a well known brand of restaurant chain in Northern India serving vegetarian cuisine with a speciality in south Indian delicacies. With the success of food and beverage industry, Sagar Ratna has become one of the most popular restaurants. Jayaram Banan, Chairman of Sagar Ratna, shares the success journey of his venture.
Abha Garyali (AG): Share Sagar Ratna’s success story from origin and growth to success.
Jayaram Banan (JB): SAGAR is my brain child which I started under the brand name of “SAGAR” on 4th December 1986 in Delhi. The initial capacity of the restaurant was a mere 40 seater but now it is 240.The high quality, moderate and affordable pricing, hygiene and personalised service is the success mantra of “SAGAR”. The growth of the business is spectacular. We have added 23 outlets of our own and 28 franchise outlets including one at Singapore. The franchise concept was conceived in the year 1999 when we opened our first franchise outlet at the Hotel Maharaja Regency in Ludhiana.
AG: What difference have you noticed in the growth of the brand after the company opted for franchising?
JB: In fact we had frequent enquiries for franchise since the year 1990 when we opened our second outlet under the brand name of” SAGAR RATNA” at Lodhi Hotel. Initially we were reluctant in giving the franchise. However due to continuous pressure we finally adopted the concept of franchising in the year 1999. We have already added 28 franchise outlets as on date and very shortly opening 8 more franchise outlets in Rajpura, Solan, Roorkee, Shimla, Karnal, Bangkok, Palwal and on the Jaipur highway.
AG: What is the eligibility criterion for taking the franchisee of Sagar Ratna?
JB: The basic eligibility requirement of the proposed Franchisee is his willingness to devote time in the business. Secondly the franchisee should have basic knowledge of the food and beverage industry. The other criterions are as follows:
- The minimum requirement of area is approximately 4000 sq. feet preferably at ground floor.
- The franchisee should have a capacity to invest around 60 lakhs for establishing the restaurant.
AG: How many franchisees do you have and in which all cities?
JB: We have at present 28 franchise outlets spread over various cities across the country like Ludhiana, Chandigarh, Meerut, Gurgaon, Faridabad, Panchkula, Patiala, Kosikalan, Ambala, Allahabad, Yamuna Nagar, Guwahati ,Dehradun, Nagpur, Amritsar, Baddi, Noida, Saharanpur, Ghaziabad , Katra, Mohali, Mussoorie, Jammu, Vrindavan and also one outlet in Singapore.
AG: What all training and support does Sagar Ratna provide to the franchisees?
JB: We provide entire trained team including managers and helpers. We also send the substitutes as and when required by the franchisee. Our quality of control team visits the franchise outlets to check the quality of ingredients, cooked food, hygiene, service etc, minimum once in a month.
AG: How much investment is required by an aspiring franchisee in terms of money, time and dedication?
JB: The minimum investment required for 150 cover fine dining restaurant is approximately 60 Lakhs. An aspiring franchisee has to devote minimum 12 hours in the restaurant. The owner’s presence is the main motivation for the employees.
AG: What are company’s future plans in terms of expansion through franchising?
JB: We have plans to open 10 more franchise outlets in the financial year 2009-10 including 2-3 outlets abroad.
AG: What is the break even period for a ‘Sagar Ratna’ franchise?
JB: The break- even in most of the franchise outlets is in the first month of operation itself. However in a few cases it might take six months.
AG: What are the challenges that can be faced by a franchisee in this business? How can they overcome these challenges?
JB: As such we do not anticipate any challenges to be faced by the franchisees. Being a responsible franchisor we give all kind of support to the franchisee in smooth running of the business. However any local disturbances/problems which may hamper the business is beyond our control. To elaborate the case, the initial business in our Guwahati outlet was quite good, but due to local terrorist disturbances the business growth has been hampered which is beyond our control.
AG: Share with us any new venture that your company has entered into?
JB: We are now opening 3 Star Hotel at Mangalore probably by October 2009. Though the Hotel is in the 3 Star category but we plan to give 5 Star amenities/ambiences. We intend to open couple of more Hotels in various places. We are also planning to start Hotel Management College in near future.
