School dropout starts food chain; sells Rs 300 cr idli/vada a year!

Desi vegetarian food chain--Sangeetha group of hotels, has completed a two-tier restructuring process to ensure homogeneity in growth and ensure delivery of quality food. Under the terms of the rejig, a newly created limited liability partnership – Sangeetha Caterers & Consultants, in which the two owner siblings are partners, will be the umbrella organization for the entire Sangeetha group.

Every Sangeetha unit pays either a retainer or a royalty to the limited liability partnership for using the Sangeetha name. Besides, franchisee units will now have a 15 to 20% stake held by the holding company.

The food chain, started by a school dropout P Suresh in Chennai 34 years ago, has 54 outlets across individually owned, franchised and overseas formats. If Suresh is credited with starting the chain, his elder brother Rajagopal cranked the growth engine for Sangeetha.

“We have grown to this level without proper management structure in place. We, therefore, though it is essential to put up a system in place both to manage the existing operations besides growing the business to the next level,” said P Suresh, managing director of Sangeetha.

The chain, now clocking revenues north of Rs 300 crore, is looking at a 20% growth next year, largely driven by existing operations. “As the custodians of the Sangeetha brand, it is our responsibility to ensure the quality of what we give remains highest. It was therefore imperative to pick up equity stakes in franchise units. This will help exercise better supervision,” P Rajagopal, MD of Sangeetha added.

With this, the group has completed one layer of restructuring and is now working on the second level. “Even at an operations level, we want better systems and processes in place. We are also creating a standardized procurement policy, uniform HR policies. Basically, we want to streamline the operations,” Rajagopal said.

The chain is putting up a Sangeetha Code in place. The Code deals with creating an end-to-end framework of rules for all those who use the Sangeetha brand, including payments to staff and vendors, use of brand logo etc. Under the new terms, the franchise should sign up an exclusivity clause in the food space and will not be allowed to do any food business other than with Sangeetha. “We do not want investors to take up a Sangeetha franchise. We want people who will get involved in the day-to-day operations,” Rajagopal added.

The chain is also looking out for a professional CEO who will supervise the day-to-day operations of overseas units. “We have 15 units now, and the 16th is coming up in Qatar next month. Between the two of us, it is becoming a stretch and therefore we are looking for a CEO for overseas operations,” Rajagopal said.

“As a next step, we will draw the contours of design related requirements for any new Sangeetha restaurants that will come up. Two models will be created, one for 200 covers and more and the second for 100 covers. This is to bring about more standardization,” Suresh said.

Source:-https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/school-dropout-starts-food-chain-sells-rs-300-cr-idli/vada-a-year/64657607

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