Food has always been the love of their life for many. People do not mind spending loads of money when it comes to tasty food and this boosts restaurant and food service businesses. With good service, food, and quality the food business can sustain well in front of the customer preferences.
This theory was well understood by Dheeraj Gupta. He completed his diploma in Hotel Management from the Institute of Hotel Management, Mumbai, and later did an MBA from Symbiosis Institute of Business Management, Pune. Both the degrees gave him the credentials of food and business together. What increased his interest in the food industry was his family business which was into traditional food and sweet business, which made him incline towards starting his own unit.
His plan was to establish a sweets manufacturing and distribution unit focusing on Indian sweets, the way chocolates are marketed abroad. He took a loan of Rs 15 lakh from the bank even after his parents were ready to finance his efforts. His idea also included exporting Indian sweets to foreign countries that have heavy Indian population.
But things didn’t work out as he thought as the market that time wasn’t ready to accept such a business. He had made several mistakes and had lost Rs 55 lakh after borrowing funds from his father, brother and a bank. He went on pumping funds for the business but nothing worked and he had to shut down his first business idea Shagun.
Five months later in the year 2000, Dheeraj again had a new business idea related to food. He was quite disillusioned by the business models of McDonald’s, Domino’s, and Subway. They are focused on one product i.e. burgers, pizzas, and sandwiches and still were able to create a greater market. The same way Dheeraj decided to focus on one product and create a business for that. The product which he thought of was a vada pav, which stood to be the life line of the working population of Mumbai every day.
He set up his first vada pav shop in Malad, under the name of Chaat Factory. But, he wanted something that could differentiate him from others. He outsourced the making of the patties and would just fry it at the shop. Also, he increased the size of the patty by 20 percent than what others were selling. This gave birth to a new brand name Jumbo King which was related to the size of the patty. Also, good hygiene was also one factor that he used to set up a customer base.
Jumbo King started making money from day one. The consumer response went on increasing as Jumbo King differentiated itself by the quality and hygienic making of the vada pav. The staff would work with gloves in hand and present their product with innovation. The promotion of Jumbo King mainly went on happening through word of mouth publicity and it witnessed a turnover of Rs 40 lakh in the first year.
This motivated Dheeraj to start with the chain of outlets and so his second outlet for Jumbo King was opened at Kandivili. By 2005, they had five outlets in Mumbai. Later, because of the expanded operations Dheeraj was in a dilemma whether to expand through company-owned stores or franchisees. He went with franchisees and converted three company-owned stores to franchisees. In 2009, some investors acquired 35 percent stake in the company which Dheeraj thought was good to ensure the smooth working of the organization. Level by level Jumbo King went on with the franchisee model and started receiving eight percent royalty fee, which later upgraded to ten from the total sales done by the franchisees of Jumbo King.
Dheeraj’s wife Reeta, who initially worked for the marketing and PR of Jumbo King, now runs the company of her own. Dheeraj had also tried expanding his business to Gujarat but it did not work as the distribution of patty wasn’t possible, as patty is a perishable item.
Today, Jumbo King has got two centralized kitchens at Mumbai and Pune which makes it easy for the distribution of patties which saves time and cost. The next big aim for Dheeraj is to achieve a turnover of Rs 100 crores by 2018.