Jumbo King Vada Pav

Jumbo King Vada Pav Would you be able to resist delicious roadside food - if it were hygienic? Dheeraj Gupta, the Jumbo Vada Pav King, bet you couldn't. Now every day, at least 40,000 people prove him right.

Quick Facts Entrepreneur : Dheeraj Gupta

Age : 33

Company : Jumbo King Foods Pvt. Ltd.

Based in : Mumbai

Founded in : 2001

Industry : Hospitality/ Service / Travel

Business Summary

Retail chain/ quick-service restaurants branding roadside food

The Idea Ironically, it wasn't the Mumbai-ite's love of the vada pav that initially inspired Dheeraj Gupta. Though biting into one of the piping-hot treats, consisting of deep fried potato dumpling served in a lightly-buttered bun, may be elevating, Dheeraj's original inspiration for Jumbo King Vada Pav was much more prosaic. While visiting London, Dheeraj stayed with a friend who owned a Burger King franchise. "That's when I saw how their business worked," he says. Dheeraj was fascinated by the fast food franchise business. "Back in India, I happened to come across a book about the person who set up McDonald's. It inspired me tremendously and I decided to follow the same model." But he wanted to give the business an Indian flavor. "Vada pav was the obvious food choice because Mumbai-ites love it," he says. Vada pavs are one of Mumbai's favorite roadside fast foods. Dheeraj took his idea further - he was willing to bet that, for snacks they knew were hygienic, people would pay him more than twice the price than they would pay for a vada pav from a traditional street stall. So in August 2001, Dheeraj set up an outlet called Chaat Factory close to Malad station, a suburb in Mumbai. "I wanted to sell hygienic chaats in the market. But I started with vada pavs only." His success selling this one snack focused his attention, and he renamed the company Jumbo King Vada Pav.

The Opportunity It turns out that vada pavs are a young person's food. In fact, a feasibility study performed by Jumbo King showed that 75% of vada pav purchasers are 16 to 25 years old. Also, surprisingly, the majority of people purchasing the snack hail from the higher income brackets. At Jumbo King, Dheeraj and his team are therefore playing into some important trends: more young people today have money to spend; and at the same time, they are increasingly health- and hygiene-conscious, wanting to know that they are receiving good quality food. Jumbo King, explains Dheeraj, "is riding on this generation." Thousands of street-side vendors still dominate the quick food market, and placed among these, Jumbo King is distinctly different. "Right from deciding to use paper to wrap the product in, having processes and systems in place, branding a common Mumbai-ite's food, to running the business like the Western style fast-food giants, we have constantly innovated, dared and gone against the tide." In one area, Jumbo King maintains a more traditional outlook - like all retailers, they focus on location, location, location. Today, all Jumbo outlets are located near railway stations. By combining the elements above, Jumbo King seems to have come up with a successful "secret sauce". Today the company has 30 outlets in Mumbai, two in Surat, one in Ahmedabad, one in Baroda and one in Pune.

The Money A loan of Rs. 2 lakhs kick-started the business. Growth has been helped by the fact that the business can generate quick cash flow: the first Jumbo King outlet at Malad made money from day one. "All the money from the business was ploughed back into buying the second store," says Dheeraj, who used to take back home a salary of only Rs. 5,000 a month.

Dheeraj has been creative in funding additional growth, tapping different sources. He took a bank loan to open the third store at Andheri (W). The fourth store became the first franchised store of Jumbo King. Since then Jumbo King has followed the franchise model. How will Jumbo King fuel future growth? Dheeraj and his team feel they would like to bring in investors, but only after they reach the 100 store mark. "The money from this investment will take the product to a completely different league," says Dheeraj passionately.

The Team Initially there were a lot of objections. "Everyone told me I was mad to waste my hotel management degree by selling vada pavs. But I was determined to make it a success," explains Dheeraj. Dheeraj started Jumbo King along with his wife and four employees, who helped with cleaning, packing and maintenance. "We did all the accounts ourselves at the end of the day at the store. There was no office." Gradually, he integrated franchisees into the system. With the support of his wife Reeta, also an MBA, Dheeraj has managed to expand the Jumbo King team to a total of 35 employees, with an increasingly professional set up. In fact, they have brought in a CEO, and are looking for senior people to join the team. Dheeraj puts forward a mature perspective, "The idea was to get in people who have seen larger businesses, and who can anticipate issues of scaling better than I can."

The Company - today and tomorrow What started off as a tiny experiment in 2001 has expanded to 35 outlets in five cities, catering to about 40,000 people every day. This translates into some solid financials. This year, Jumbo King is looking at a turnover of Rs. 18 crores (almost $5 million) and with rapid growth to a projected turnover of Rs. 60 crores in 2008-09. Dheeraj anticipates continued growth in the fast food Indian market for Jumbo King. He believes "the Indian market can easily accommodate 5000 stores in 8-10 years time. We are looking at Jumbo King doing a billion dollars worth of revenue by then," he says. Looking beyond India, he adds, "With such a huge local population and such a huge expat population, I don't see why there can't be 12-15,000 Jumbo King stores all over the world." And, it's not just independent vada pav stores that he's considering. Dheeraj wants to expand into food courts and malls. "Vada pavs have the potential of becoming a big category by itself, with many brands competing in this category. And we have an early mover advantage" says Dheeraj

What keeps you awake at night? "That we are far from reaching an absolute comfort zone, where our company has become anti-gravity," says Dheeraj. He explains that even with 35 outlets today, he's still plagued with the same fears that he had when he started. "Now with new outlets in other cities we are playing the wait and watch game again. We are relearning all over again. We need to see the sustainability of the model. And we feel the same fear of what happens if it doesn't work. After all, it's not daily food for people outside," signs out a nervous Dheeraj.

Company History

Jumbo King began its journey to brand the Vada Pav on 23rd August 2001. Inspired by western models and applying it to Indian food, Jumbo King believes that the common man has the constitutional right to get hygienic food at an affordable price! Jumbo King has been founded by MBA couple Dheeraj Gupta and Reeta Gupta. Jumbo King has a team of people spanning the functional areas of operations, business development, franchisee relations and marketing. Operations looks into store running, logistics and training. The head office at Jumbo King is called the Support Centre and the operation team supports the franchisee network and their staff to run the store as per the guidelines laid down by the franchising system of Jumbo King. The business development team looks at increasing the number of outlets by ensuring a new outlet to be opened as fast as possible, for which they do a strong survey and ensure that the outlet is in the best possible area. Franchisee relations have to be maintained by solving their queries and lending a helping hand wherever possible. Marketing looks after the media, promotions, branding etc. Jumbo King celebrates 23rd August as the Vada Pav Day since on that day of 2001 it came into existence.

'If a Burger can get listed, why not a Vada Pav?' By Sonam Vij Published: March 7, 2007 Before he started India's answer to McDonald's, Dheeraj Gupta, the co-founder of desi replica Jumbo King Vada-Pav even worked with the burger chain to understand its operational secrets. Since it started, the chain has grown to nearly 30 outlets strewn across suburban railway stations of Mumbai and uses its own outlet radio to market itself. In a conversation with PaGaLGuY.com, co-founder, Dheeraj Gupta's wife and SCMHRD alumna Reeta Gupta tells her story, speaks of entrepreneurship from an MBA perspective and women as managers

How and when did the idea of starting Jumbo King come to you? The starting point was when my husband and I were having a burger at Burger King, London. That’s when the obvious similarity between a burger and a vada pav came across to us. The only difference between the two was the level of marketing. Post the incident we returned to India and decided to experiment with the whole idea in Mumbai. Since the beginning we always believed that the vada pav was essentially an assembly-line product rather than a custom product, which had to be prepared and thrust into the consumer’s hand. After seeing the process at Burger King we read on the history of McDonald’s. McDonald’s is a larger chain of burgers and also products. Operationally they have tried everything and perfected themselves so there was no point in reinventing the wheel. One could say that the idea originated while we were at Burger King but the actual implementation began after researching on the

McDonald’s model. While starting out we also had to zero in upon a suitable name. It was during that period that we came up with names like Chaat Factory, Instant Vada Pav and several others before we settled on Jumbo King. Jumbo King is spoken of as the Indian adaptation of McDonald’s. What kind of research did you do before starting Jumbo King? That’s true, we have very much duplicated the McDonald’s model. We went to the extent of knowing and replicating where they get their regular supplies from, where they use a particular material and where they do not. Luckily for us McDonald’s is a very well documented company so whatever information we wanted regarding them was easily available. Also one can stand in the long queues at McDonald’s and get an opportunity to observe whatever is happening at the outlet. After standing in the line one can also hang around and get a feel of the atmosphere, operations at the outlet. Not only did we research a lot but also my husband went ahead and worked in a McDonald’s outlet to get a better understanding about the operations and working of the outlet. He worked there for a brief period of ten days, which was sufficient to give him a comprehensible picture about the largest fast food chain. Whereas consumer behavior is concerned McDonald’s was the not exact fit for us mainly because we are much lower in the spend category. We are a six-rupee product while they are a twenty-five rupees burger to start with. Considering this fact of we selling our product at six rupees we appeal to an entirely different audience. But I would like to call McDonald’s as the baap of quick service restaurants. How did you market and spread the word about your brand? Personally I feel we were lucky to start shop in Mumbai as the city has a large population of 1.4 crores. The next big city in India one can think of is Delhi, which does not have half the population of Mumbai. Secondly the structure of Mumbai is so work oriented that there are specific places where Mumbaities frequent in large numbers. As a result currently Mumbai is the place for us and nothing else. If you are a low value product and if you want to make money you need to be a high volume player and that’s the reason we are present outside every railway station. Going forward when we move into other cities the strategy would change as per the city. The cities that are on the anvil include Pune and Surat, a March opening is scheduled for them. Talking about brand awareness, initially we did not advertise much and frankly speaking most start-ups do not have enough money to promote their products or services. Also we realized the power of hearing and sound very soon, thereafter we started a pseudo radio called Radio Today,

which connects all our food joints. The system helps informing customers not only about our products but also notifies them about our hygiene and quality standards. We have hired a hygiene consultant who advises McDonald’s and Pizza Hut. These systems help enlighten our customers of all the aspects about Jumbo King. In terms of standards we are pretty much up with the best of the international players. We also alert our customers about various offers running at the store through the radio service. This form of communication helps us facilitate exposure and brand awareness. We have several colleges approaching us but we are unable to support these college festivals through sponsorship. Even distributing ten thousand rupees per institute is difficult for us. Instead we provide them with guidance and mentoring which lets the students know we are there for them if they desire guidance, internships or assignments. Making them aware of this fact is a crucial part of our big plan. Therefore I visit several colleges and give talks on relevant topics. This kind of activity I do is not much for brand building but more for keeping up the level of interest of the colleges and students regarding Jumbo King as they form a major part of our customers. Again in terms of brand building I would like to thank all journalists who initially took Jumbo King so seriously. The first thing written about us was by a young journalist who probably visited our store in Dadar and liked the product. After a good experience these young journalists went back and convinced their editors to write about us in their daily paper. Thus originally word of mouth definitely worked for us greatly. As a part of our brand building exercise we started celebrating something called the Vada pav day about two years ago. It was a tribute to consumerism as experienced by the common man. We tried to make this very clear that in order to avail an exciting offer one really does not need a lot of money, one could just avail it for seven rupees. We realized that people really appreciated such offers. Typically in August our sales go up because people wish to come and experience the fun of celebrating a Vada pav day. We believe that at least one in every ten people knows about the Vada pav day. Did you have a proper revenue model in place when you started out? How did you build upon your revenue streams? Are you looking at any kind of external funding? We started our business with two lac rupees, which we borrowed from my husband’s father as an initial investment. Subsequently there has been a single revenue stream clearly selling our primary product, vada pav. But being a franchised company we have a lot of mini entrepreneurs working under us who book their name under their company and sell Jumbo King vada pav. Jumbo King usually earns royalty from these companies. On the other hand we entirely market and manage the Jumbo King. Expressions like Revenue model etc seem good but at the end of the day the product is what really matters most. The customer has to like the product and should repeat his behavior is the ultimate goal and not make do with it. When the customer comes to Jumbo King he should be aware of the product and know the experience of consuming the product.

As far as VC funding is concerned we are not looking at that. One can say strategic investors are welcome, which would typically be someone like logistics partners etc. For us partnership does not always mean money, in fact they can even be in the form of expertise and know how. Expertise can be in the area of supply chain management and procurement. Could you explain what kind of model of operation and functioning is followed at Jumbo King? There are two ways to run a multi store operation. Firstly it is when a company owns all of its stores like a Café Coffee day or Starbucks. The other is you do not own all this for example McDonald’s or Subway. As we all know there is no rocket science in knowing how to make vada pav. Basically what we have done is that we have introduced a certain level of technology and hygiene into the process. In order to provide a genuine and high-quality product the process has to be taken care of and handled by someone very competent. How can one differentiate between one vada pav from the other? In our case of course we use the finest quality ingredients such as the best oil. We use the oil, which is 25 pc more expensive than the oil used by anybody else in the market. Apart from the obvious technical specifications we have an adequate service dimension, which an owner can bring into the picture and not somebody who is a manager or employee so an owner involvement is present. The owner mentality itself is such that one would optimize results out of what core is given, all those things put together add up to the franchising model. But as any franchiser we also have certain basic responsibilities, which include firstly keeping costs low, secondly to train the people and thirdly market the brand. These are our duties and of course expansion of the product line and company is our prerogative. When we came out with newer products in the same category that was essentially handled by a team of franchisers who came together and thought of almost 11 products. Ultimately one was finalized. What is the organizational culture you practice? What role does service and customer delight play in your organization? It is pretty much free actually, though we focus a lot on field work, there is a lot of emphasis on data and employee learning in terms of what did he or she do and learn during the day. We have around 20 employees and currently they are all out on the field. The people in the operations field are monitoring the floor employees and the business development team is exploring where the next site should come up etc. We look for attitude and knowledge of the field. In our field attitude is very important. Even though a person may be skilled but until he possesses the correct attitude he doesn’t fit in. It is very difficult to train people to have the right attitude. I cannot teach you to be a go-getter There is a lot of delegation and so there are people who have matured so much in the company.

In fact there are many important meetings for which Dheeraj and I do not even go, the employees handle it themselves. We have moved out of the startup phase wherein everything is more streamlined, structured and therefore we do not have people doing anything and everything. Being a woman manager how do you manage and maintain the balance between your professional and personal life? Honestly my child goes to a day care center. My daughter is five years old and my son is nine months. My daughter is out the whole day as she goes to school in the morning and day care in the evening. I pick her up at about 5.30 pm, which leaves me free to do my full days work I have an advantage as I live in a joint family. My son is looked after by my maid and supervised by the other members of my family. According to me women need to manage both home and work. Every morning when I leave my son I feel terrible about it but then you have to go out there and finish you work. What advice will you give to women managers? How should they manage their surroundings? How can they take initiative and build something of their own? I come from a very conservative Marwari setup where women are not allowed to work I am the only workingwoman in my entire family. It is not at all easy; initially I think people do not even believe that you truly want to work. According to them it’s a craze, which will eventually phase out. But I feel you believe in yourself and have the confidence to convince them that working and being independent really means a lot to you. On the other hand if they are convinced about your passion and fervor then they will support and encourage you. They have to really believe that you are adding a lot of value and making the family proud when you are out in the field. One should not give up hope; if women want they should start work with two hours a day then extend it to three hours slowly increasing your work time to nearly a full day. Initially I used to return home at 3 pm but these days I work full day, therefore you have to make it a step-by-step process. You cannot suddenly wake up one morning and take a decision that I want to work the whole day that does not really work well. In addition to this the work you do should not be an excuse for avoiding the responsibilities you have at home. One should fulfill all of those, even if it is at 11 pm in the night because your work is considered, as the selfish part of you and what you do for the rest of the people in your family is the unselfish side. So you have to balance between both of them. What skills apart from a possible MBA do you think could help women managers to do well? In my opinion first and foremost thing is Patience, everything will come to you if you have the ability to wait and stay on course with your aim for e.g. after MBA when we started making Vada Pavs everybody would make fun of us saying things like "Kya MBA iske liye kiya tha? You could have sold Vada-pav even without a MBA." So we have gone through those kinds of situations where we have been mocked at but today sitting here I think that even during those days we believed in ourselves and today too we believe in ourselves.

I think the day McDonald’s got listed on New York Stock Exchange was a very big day as that was the day hamburger got listed. The hamburger is the common mans food as in India people of all strata of the society can consume a vada pav, similar is the case with the hamburger in the United States of America. So we thought if a hamburger can get listed why not a vada pav? Eventually one has to set a goal and be committed to fulfill that goal. Especially on the day when you are down and out you should keep your calm and take things in your stride rather than being impulsive. As a married couple how have you and Dheeraj divided the roles? How is it working together? How do you resolve issues and keep professional life separate from personal? It’s really tough because you carry all your fights back home. But the level of understanding you reach as a couple is enormous. You are aware of all the pressure points of each other and you know when is the day to leave the person alone and when it has been a hard long day. At the same time you also develop tremendous respect for each other individually, over and above being a couple. Dheeraj is the entrepreneur and the CEO and looks after the finance aspect, as to where are the stores going to come up and whom to take in as a partner. He also guides and takes care of the production and logistics. I exclusively look after the Public Relations (PR) and one would address me as the external face of the company in terms of the communication that we carry out. I also look after promotional schemes that are running in the company and at tie-ups that the company does. When we are working so closely sometimes boundaries do get encroached and a little bit of your personal life spills into the professional life and vice versa. It happens naturally, you cannot do anything. You have to learn to live and deal with it. What is your future plans with respect to Jumbo King? Do you plan to go national soon? Hopefully we are planning to cover Gujurat and Maharashtra by 2008 completely. Then on the basis of how it works outside the city of Mumbai only then will we decide about going any further. Every city in India is different from the other, like in Chennai the vada pav is available for 20 rupees, and in Delhi it’s available for approximately Rs 10 to 15. However Surat, Pune, and the rest of Mahrashtra are pretty much familiar with vada pav. The pricing pattern in the rest of Maharashtra is similar to what is prevalent in Mumbai. Outside Maharashtra we will have to customise and price our product accordingly. As of now we are not planning to diversify into another product category for sure. If another product category comes up it will be in a different brand name for example dabheli, it would be a dabheli flavored Jumbo King as Jumbo King means vada pav. Hence it becomes a dabheli flavored vada pav. We are also planning to come up with chaat stores but that’s just a thought yet because we are unable to fulfill the volumes in vada pav to even imagine of getting into another product

altogether. And whereas chaat is concerned it is not an instant and easy product to prepare. Also hygiene and other factors have to be taken care of well. I would not completely do away with the idea. In fact we might do it some day but only once the back end is in place will I be able to substantiate it. It definitely will not be like any other start up, It will be a different ball game totally.