Jasper Reid:

Both my grandfather and my father were Englishmen, but then they shifted to India. And then when I was a young man, I was sent to Bombay, where I lived for two years between 97 and 98. So there’s an Indian love in our family.

 

Ashish Tulsian:

And what would be your top three advice to somebody, you know, who’s coming here? 

 

Jasper Reid:

It’s like driving in India. You can’t be hesitating on the roundabout, right? You’re all in. Dive in, get going. The second thing probably is, what works in India, long, patient, with loads of capital. What doesn’t work in India is the opposite. The rent to revenue ratios in India messed up. If you require any form of volume, the rent you’re paying is a catastrophe.

 

Ashish Tulsian:

Do you even believe that Indian QSRs can apply American process QSR principles? When you look back, building business in India was a mistake.

 

Jasper Reid:

Definitely not a mistake. Best and most enriching 11 years of, but all of our lives. A million ups and downs. I’ve learned more doing business in India in 11 years than the entirety of my career.

 

Ashish Tulsian:

If you had to make or build Jasper’s this time, what will that menu look like? 

 

Jasper Reid:

The wrong thing to do is have long menus. 

 

Ashish Tulsian: 

Welcome to Restrocast So Jasper, how did India happen? And I’m really, really curious because it’s been 11 years. I am sure that you’re more Desi than Gora now. But how did it all happen? How did you land here?

 

Jasper Reid:

Hi, Ashish. Thank you very much for having me on your amazing podcast. So there’s sort of two answers to it. My grandfather worked for JRD Tata in the 1950s. And he was part of the team building Dum Dum Airport in Calcutta. Then my father in the 80s and the 90s, ran all the operations for HelpAge India, which is one of India’s better known NGOs.

 

Ashish Tulsian:

Was your father, was he born and raised here?

 

Jasper Reid:

Englishman. So both my grandfather and my father were Englishman, but then they shifted. There’s a family pattern here. So they shifted to India. And then when I was a young man, I was sent to Bombay. I was based in Hong Kong with the owners of Cathay Pacific Airways. So they sent me to Bombay where I lived for two years between 97, 98. So there’s kind of part one of the answer is there’s an India, there’s an India love in our family. And my children who are twin girls age 17, the fourth generation of the family post-independent, this is all, all of us have worked or built, worked for or built modern Indian businesses. This is not a Raj East India Company story. So with all of that, I found myself working for an Australian investment bank called Macquarie. And I wanted to do my own thing. I wanted to do something in India. So I set up a company called IMM in London. And my idea was to create a trading house with India.

You know, a model where I could raise capital in the UK, and create and control operating businesses in India. But when I started, I had no balance sheet, and I had no money, right? And then quite by chance, the owners, private equity company, the owners of Pizza Express, which is, you know, as you know, a large casual dining brand in the UK, they called me up and said, do you know anything about India and China? Two of the world’s biggest topics. So I said, I don’t think anyone’s crazy enough to say they really know about it. But I’ve operated in both.

I’ve just started my business. And I will kill to get a gig with you. So they basically, long story short, they signed me up to help them get into, actually back into the Indian market, and help them to sort out their China market. So that was my initial… India entry. So this is 2012. 2012. And so I spent a year and a half doing a lot of work in India and China simultaneously. And as you know, the Pizza Express vehicle in India ended up being a joint venture with the Bharti, the Battle guys. 

 

Ashish Tulsian:

Yeah, Bharti Mittal.

 

Jasper Reid:

The Bharti Mittal guys, because they kind of wanted to get, they created a family office, they wanted to get into food for one of the family members. 

 

Ashish Tulsian: 

So you signed them up as a franchisee or a JV partner? 

 

Jasper Reid:

It was a JV with a franchise sitting off the back of it. But I kept doing more and more work, partly because… He (Rakesh) was venturing into the restaurant space. And they’d done food with things like Del Monte, but they hadn’t done restaurants.

So Rakesh kept asking me to stay on, to hire the team, to find a site. And so it was kind of, I knew nothing about restaurants before this, but I was building knowledge. And when I wasn’t doing that for Rakesh, I was in Beijing and Shanghai, developing that business. So I did all of that. And then actually, it worked out very well for Pizza Express because they sold the entire business to Honi Capital, which is the fund that sits under Lenovo, the personal computing brand. And Honi paid something like $2 billion for Pizza Express. And a lot of it was because of the work I did on India and China. Unfortunately, I didn’t get any of the $2 billion, but it was… Anyway, it got me back into India.

 

Ashish Tulsian:

And then, you know, Pizza Express, you were helping Pizza Express Global and Bharti family here. 

 

Jasper Reid:

Yeah. 

 

Ashish Tulsian:

How did you venture into Jamie’s Italian and Wendy’s?

 

Jasper Reid:

Yeah, so what happened was, so I had that idea of having my own trading house. And because I’d learnt, you know, I was being paid to learn restaurants by Pizza Express and Mr. Rakesh Bharti Mittal Sr. I thought, okay, I’ll do it myself now, right? So I thought, okay, well, I need a couple of brands. So having done pizzas, I went to see Jamie Oliver. And I said, in London, I said to Jamie Oliver, Jamie, I am the King Cobra of pizzas in India. And he kind of looked at me and thought, how does this work?

You’re not Indian. You sound like a sort of classic posh English boy. And Jamie’s from a kind of East End background. He’s amazingly successful, famous guy. Anyway, I kind of talked him into giving me a chance. And long story short, I won effectively a competition against Reliance. I almost lost the rights when Reliance Retail wanted to get their hands on Jamie’s. But I managed to persuade Jamie to go with me. 

 

Ashish Tulsian:

Against Reliance?

 

Jasper Reid:

Against Reliance. 

 

Ashish Tulsian:

Wow. 

 

Jasper Reid:

Against Reliance. That’s a much longer story. But what I basically said to Jamie was, look, I’m incredibly hungry for this. I will give my life to making this brand work. Absolutely go with Reliance. They’re fast. No one’s bigger. You know, they’d come to know what Reliance is. But what I said to him was, you know, whether or not they’re able to give it the same level of focus and attention and love and hunger is a question mark. Anyway, I was very lucky he went with me. And then I thought I better get, I better have more than one brand because the chances are, you know, one fails, whatever. However much love or hunger you throw at it. And at that time, you’ll remember this, Burger King were trying to get in the market.

And I knew people in their corporate office in Switzerland. So I went to them and said, you know, I‘m a King Cobra of, I couldn’t say burgers, of something. And I got into that process. What I hadn’t really realized was Samir and Everstone. They were way, they were way, way ahead. So my bid was just, was kind of ballast. You know, it was making up the numbers. So it didn’t work. But we put a lot of work into QSR Burger. And, you know, we’d studied the model. We’d looked at supply chains, we’ve done all this. So I got on a plane and went to Columbus, Ohio, which is the home of Wendy’s. And I met with the CEO, it was a man called Emil Brodick. 

 

Ashish Tulsian:

How did you zero down on Wendy’s? 

 

Jasper Reid:

World’s third biggest burger brand. So McDonald’s was in, Burger King’s the next biggest. And Wendy’s, so we kind of looked it up and said, like, who’s the next biggest one? And actually, I think it’s still the case. I think Wendy’s has more sites in America than Burger King. So it’s actually bigger, so there’s less McDonald’s than Wendy’s in America. But if it’s global, it’s McDonald’s, Burger King, then Wendy’s. So I went to see the CEO. 

 

Ashish Tulsian:

I never realized Wendy’s has more locations in the US. 

 

Jasper Reid:

Yeah, it does, it does. It’s a huge, I mean, it’s a huge brand in America. It’s less, it’s much less international. 

 

Ashish Tulsian:

Yeah, of course.

 

Jasper Reid:

Though it’s growing very quickly now. Anyway, I told Mr. Brodick the same story. And after another couple of years, and then they looked at everyone, I fetched up with their rights. Then I raised money against those rights. And then I shifted with my family in 2014 to India. And we’ve been building those brands ever since.

 

Ashish Tulsian:

What was your family’s reaction? Because moving to India, I’m sure it was a crazy decision. And while you, you know, your family has old Indian souls, you know, who have been, you know, getting attracted to the country, your grandfather, your father, but what about your wife and, you know?

 

Jasper Reid:

Yeah, so two or three things. So as a congratulations on your newborn, Edda. So at that stage, I had twin little girls, age six, nothing more wonderful, right? Nothing more wonderful than a father. But their voting power age six was relatively small. Of course, the great thing about age six is they’re very portable. You leave it to 13, you have a massive teenage rebellion on your hands, right? So there was a bit of timing. Now with my wife, I’d been sure to, when I was doing projects at Pizza Express, she came to see me in India quite a bit.

And we’d have lovely times. And we’d, you know, we’d stay at the best places and be on the beach in Goa. So I was showing her a kind of rose tinted view of India. We lived in the English countryside at the time. And I think we all basically wanted an adventure. But the clincher, Ashish, was I said, it’ll be two or three years. Now it’s been 11 years.

 

Ashish Tulsian:

Got it. And last 11 years, we will dive deep into, you know, how was Jamie’s and Wendy’s and how the business was. But we’ll first go to the climax. When you look back, do you think that, you know, doing business in India, building business in India was a mistake?

 

Jasper Reid: 

It’s definitely not a mistake. Best and most enriching 11 years of not just my life, but all of our lives, right? It’s been 100% Ashish, a sensational experience. Now, we’ll get into it. But a million ups and downs, hundreds of thousands of near death, corporate experiences, all kinds of shenanigans. But I can say this hand on heart, I’ve learned more doing business in India in 11 years than the entirety of my career.

 

Ashish Tulsian:

Why do you say that? And you’ve done business, you’ve experienced various different cultures, various different countries. What is special about learning business in India or doing business in India that you don’t get anywhere else? I mean, and I’m an Indian, Delhi born and raised, have always done business in India. In fact, half a decade back, I started doing business outside of the country. 

The kind of muscle power that I built in a low trust environment, for example, which is not only India, which is most of the developing nations, which carries the largest population in the world. I at times wonder that was it even needed? Do I need that muscle power? Maybe I don’t and I can do without it. We need it here, right?

 

Jasper Reid:

Yeah, we need it here. For sure. So to answer your question, so for me, life, work, everything is learning. And if you’re an Englishman who comes to do business in India, the learning curve is very steep, right? In the same way, if you’re Punjabi going to Paris, the learning curve is probably even steeper. You probably get less of a welcome in Paris than an Englishman would get in Delhi. So I look at it this way. The steeper learning, the more learning, the more knowledge, right? So that’s an end in itself.

And then if I look at what have I learned from business here, whichever way you skin the cat, and I’m told that there’s all kinds of bad habits here, but there are all kinds of bad habits in lots of countries, if you ask me. But it’s very, very competitive here. I think that’s the bottom line, right? So even in an immature industry like restaurants, so we’re nowhere near mature as an industry. We’re sort of in the first quarter, you know, Tokyo’s in the final quarter, you know, we’re very much in the first quarter. But it’s intensely competitive, right?

And because it’s intensely competitive, margins get pushed down. And then across the board, trying to work out how to get a P&L to deliver you a margin, let alone a return on capital, is just an incredibly intense activity, especially in the restaurant space. That’s even before you get into the 30 licenses per restaurant, you know, the cultural diversity, the palette diversity, the rest of it. So it’s a different question, right? Is it a great place to do business and get returns? We’ll come back to that.

 

Ashish Tulsian:

Alright. Alright. 

 

Jasper Reid:

We’ll come back. That’s a different thing too. Is it a great place for a foreigner to learn a lot of shit? Absolutely. Absolutely, because you’re in the arena. And as you know better than anyone, you know, there are very few countries as entrepreneurial as India, right? Well, 

 

Ashish Tulsian:

For sure. For sure.  

 

Jasper Reid:

you have to be. It’s every man for himself. This is not an abstract thing. It’s a thing indexed to how tough things are, right? You don’t get your shit together, you’ll get swept away everywhere else.

 

Ashish Tulsian:

I think entrepreneurship in India does not come out as a cool idea. It’s a way of life.

 

Jasper Reid:

No, exactly. It’s not sort of something dreamt up on an MBA course or from the valley or some podcast you learn about. It is, as Theodore Roosevelt said, it is the man in the arena, right? With the sweat and blood. Because, you know, it’s kind of, it’s not quite, but it’s sort of the corporate equivalent of a fight to the death, right? And it’s been an interesting experience because there are certain advantages of being a foreigner, right?

And, you know, it always astonishes me that kind of pretty much all around India, people are quite fond of the English. You’d think they wouldn’t be in many ways. And when they’re not fond of me, I skip into, I wave my Irish passport around just to hedge my bets a bit. But you do get a good welcome, very hospitable country, but that’s where it ends, right? Then you’re in a proper fist fight. And I found that, you know, again, each to their own. You know as well as I do how polarizing India is. You kind of, as outsiders, you either really dig it, that’s where I’m at, or you really, really don’t dig it. And it’s like your worst nightmare. If you’ve come out of Dubai or Singapore, you’re having a nice life in your condo, everything’s super regulated, high trust, et cetera, chances are you don’t like India.

 

Ashish Tulsian:

If, you know, back in UK, a young English person comes to you who’s planning to chart the same path and they ask you for advice on how to traverse India and the rules of business that you learned the hard way. What comes to your mind?

 

Jasper Reid:

But you know, funny enough, so I’ve had many young people come and work for me here from the UK and have been part of sponsoring and helping probably a couple of hundred young people from Europe to come here over the last 11 years. So I’ve got very, and at the moment I’m working on a project with, it’s a joint project between the Ministry of External Affairs, the British Foreign Office, and my business to encourage more young people to come specifically from the UK to India. 

Let me try and answer the question in a couple of ways. So the first thing, so, I mean, you’re doing business all around the world, Ashish, right? And so you’re well aware that actually if you’re a young person, however talented and however qualified and someone like the UK, jobs are not easy to come by.

They really aren’t easy to come by. So the first thing I often say to people is, look, particularly in your 20s, you know, when you’re not tied to a marriage or a mortgage or whatever, come out here because you can, I mean, this is just a practical thing. You can live in a cost-effective way. See, people don’t know this, but there’s a UK visa category called the YPS scheme that allows any graduate between the ages of 30s to come and live and work in India for two years. Right? You don’t have to demonstrate anything. You don’t have to demonstrate income, right? At the moment, no one’s taking it up because nobody really knows. But you can grab one of those, come here.

I think that actually people are very interested in outsiders and what they can contribute. And we sort of crossed, and I think time’s gone by, the idea of some whitey showing up and as a graduate and trying to get into an Indian business was much harder. But now, especially with, take businesses like yours, that’s much more international. So actually, if you can get out of here, I bet you can find gigs. You can live very cost-effectively. So, and then once you’ve got, you know, you’ve got your eye in a bit, you’ll make friends very quickly because it’s an incredibly hospitable country, right?

And it doesn’t work the other way around, right? I’m not sure the British are the most hospitable people, right? Well, of course, we’ve now got 2 million non-resident Indians in the UK, so you don’t even have to bother if you don’t want, just go and hang out with your tribe if you want, right? But the other way around, if you get a good welcome, there probably are gigs, you can live in a cost-effective way. And then for me, going back to that point about entrepreneurship, you can tap into all of that entrepreneurial zeal and excitement, the rest of it, because whatever you say about business in India, there are tons of opportunities here, right? And that’s not the case in the UK very often, it’s just a mature versus a less mature market.

 

Ashish Tulsian:

And what would be your top three advises to somebody, you know, who’s coming here? Caution, advise, or rules of the game that you have learned the hard way?

 

Jasper Reid:

I think you’ve got to throw yourself in, right? I think India, it’s like driving in India, it’s not, you can’t be hesitating on the roundabout, right? I mean, that’s what I say to most people. Number one thing is, you’re all in. Dive in, get going, you can’t, if you’re cautious, you’re just, you know, it’ll all backfire, that’s the first thing. I think the second thing probably is, and you know, it’s an obvious point, but people miss it, this is a vast, multifaceted, multicultural continent, right? 

It’s a vast, complicated place, so get across the place. I was tossing it out the other day, I’ve been to 24 states now, oh wow, and I feel good about that, right? I feel good about that.

 

Ashish Tulsian:

I mean, a lot of Indians can’t claim that, actually. 

 

Jasper Reid:

Well, do you know, and funnily enough, if it’s a usual thing, if you live in the country, then when I’m back in England, I’ll be channeling to India and France, been to all these counties I’ve never heard of. I think it’s just when you’re away, so number one, dive in, number two, get across the whole thing, and the third one, which is sort of related to numbers one and two is, just, you know, especially if you’re young, you’re coming to one of the youngest countries on earth, right, and India is not international, right? You know that as well as I do. Yeah, actually, international visitors are going down in India. Sort of an astonishing, everything else going up, international visitors going down.

If you compare corporates or cities here to other cities, let’s say across Asia, Delhi, Bombay, Bangalore, have a tiny fraction of non-Indians, right, really. We’ve got a bit of a concentration in Delhi, just only because of the diplomats. But because of that, if you’re an outsider, people are quite interested in you, right? And you can make friends so quickly here. And then my usual advice to people, it’s a bit like learning languages.

 

Ashish Tulsian:

How was the journey? Tell me a bit about your journey with Jamie’s and Wendy’s.

 

Jasper Reid:

So, they’re two very different games, right? I mean, one of the things I would say upfront is, they’re totally two different games. You may as well not be talking about the same sector, frankly. I mean, Wendy’s ran and runs on super value, 29, 39, 49 rupee, sort of 30, 40, 50 cent burgers. And it’s a pricing pyramid where you’re driving people in at the lowest possible value and hoping like hell you can upsell them, right? Before you can actually make the economic model work. Jamie’s is a $5, $6, you know, 500 rupee a head game. They’re very, very different models. I mean, I’ll come back to this later, but whether you should have got into those two different models at the same time.

Remember, I was doing all of this at the same time. So, we’ll come back to that. But first part of the answer to your question is, we simultaneously launched two different Jamie’s formats. Jamie’s Italian. And then because I thought we wanted to have a smaller pizzeria, Jamie’s pizzeria, but they opened a month apart, right? And Wendy’s, so in a three month period, we launched three formats, but it took us 18 months to get to that point because as you would know better than anyone, particularly on the Wendy’s side, the menu bore no relation to the Wendy’s that you’d see in Columbus, 

 

Ashish Tulsian:

Absolutely. Yeah. 

 

Jasper Reid:

And in fact, I remember my father, my father, he was an ex-military guy, and then he went into the NGO world. The only thing he knew about Wendy’s was that famous American slogan, where’s the beef? And I remember him saying to me, why on earth would you bring a beef brand to India? I mean, how stupid is that? Because I didn’t really, like any son, I didn’t want to hear that and we’d moved to India. So it was too late.

But he was right that, you know, I mean, we ended up on a PMIX basis, 60% of our sales were vegetarian. And I think Wendy’s in America had one vegetarian product, a black bean burger. And even that was quite new. So simultaneously launching three different brands, all in Delhi, three different sites, rest of it was, to use the technical term, a massive shit fight. Unbelievable. And it kind of goes back to my point about diving in. In a way, this is what I think philosophically, if you’re going to be busy, be like three acts busy. You’re busy anyway. You’re not getting any sleep. You may as well do the whole lot. I don’t know how right that was. And I tell you what I think about it, because this goes back to the Wendy’s thing.

On Wendy’s, we had this basic assumption that there was a market for what we call QSR Plus, that you could be like 10% more expensive than McDonald’s. And Wendy’s, generally speaking, has a good quality reputation, right? You know, it’s all made to order and in America, the beef is fresh. You know, it kind of stands for that stuff. So we thought, and that’s a very low margin business anyway, especially in India. So we thought, we’ll charge a bit more. We’ll have a better product. We’ll do things like table service, counter order, table service. Now, the bottom line was that didn’t work, right? Sometimes I wonder if, had we not been doing other brands, would we have given ourselves more mind space? But I think part of the issue was, I’m not sure we would.

 

Ashish Tulsian:

No, that’s a great point. I really want to dive into that, right? So is it, do you believe, was it the focus or is it just that the brand, you know, had no connect with Indian audience? Because McDonald’s, for that matter, though, even after all the recognition and all, you know, being omnipresent, you know, quite literally across the world, this still took 20 years, you know, to really break even as a business or 17 years to break even as a business. McDonald’s did massive campaigns through 90s. I’m a 90s, you know, kid.

So I, you know, I saw McDonald’s and I experienced McDonald’s on TV, you know, all the time, right? And McDonald was a part of my growing up years on the TV, not in real, right? And Wendy’s, from that perspective, did not do any of the marketing, at least, I don’t know if I saw any ATF. Was it just the focus or was it the fact that Indian audience do not relate to the brand, they have no understanding of what this brand is?

 

Jasper Reid:

So, I totally agree with you and you’re totally right, that whether you’re called Wendy’s, McDonald’s, Burger King, whatever, you show up, and even in the digital age, people don’t know who you are, they might, right? I mean the odd person would say, oh, Wendy’s is a square burger, right? People would be in a college in the States, that’s a handful of people.

My answer to your question is kind of, I don’t think it’s about any of those things, I think it’s about a different thing, which is, if you want to make Burger QSR with an APC of 100 rupees, which is what it was at the time, right? The per person, actually the APC was 225, but on a per person basis, it’s more like 100. You want to make that work, you need hundreds and hundreds of sites, which requires vast amounts of capital.

And that I think, in essence, was a much bigger issue for us than how we positioned it, this, that and the other, because I think in the end, and it could have been that QSR Plus was the right thing to do, but having done two or three sites, which then started to bleed out, and not having the capital to power through to 50, 100, you’d sort of never know. So my advice to anyone who goes into that part of the market, and I think Burger QSR is about the hardest bit of any bit of the Indian market. 

 

Ashish Tulsian:

Really?

 

Jasper Reid:

Well, the problem is your cost of goods sold is so high, right?

 

Ashish Tulsian:

Yeah.

 

Jasper Reid:

So I like the price point, but if I did it all again, I’d be doing Desi, right? I’d do a 100 buck a head offer, but I’d be doing Indian snacks. 

 

Ashish Tulsian:

Also, Burger is a low margin item, it’s a high cost.

 

Jasper Reid:

And if you follow that American QSR model, it’s a freezer-to-fryer supply chain, DC-driven. So the problem is your cogs are so, so your gross margin sucks. You’re selling at a very low price point, it’s hyper-competitive. The only way that model works is you have the capital to do hundreds and hundreds of sites, and you don’t blink, right? And actually, I think the jury is now out on whether that model can be made to work because I just don’t think there are people who are going to put that in anymore. I always thought when Sameer at Everstone did Burger King, and he didn’t blink, he got through to whatever, 250, 300 sites, but he’s still losing money at that point, right?

Now, he was a fund, he had, I mean, if he was listening to this podcast, he would say, no, no, no, it was nothing to do with spare capital, but A, he had it, B, he had an incentive to deploy, and C, he and the brand understood that this model really only works, actually probably only works at 1,000 sites. So I’m not trying to avoid the debate around was the PMIX or the price, you know, there were many learnings, but the bigger thing was we didn’t have the money to do it. That was the essence of it.

 

Ashish Tulsian:

I would still, you know, want to bolt on the brand recognition of the demand generation, right? Because Wendy’s, you eventually exited that and you sold it to Rebel.

 

Jasper Reid:

We sold it to Rebel, yeah, who’ve kind of made it, they’ve got 300 sites now, right? So case in point. 

 

Ashish Tulsian:

How’s that going for them?

 

Jasper Reid:

You’d have to ask them, I think. A lot of it’s, you know, sitting inside a cloud kitchen model. So extracting the economics of Wendy’s. But no, ask me the question on the brand because I’m intrigued by your thought process on it.

 

Ashish Tulsian:

Well, so the thing is that my view is and my experience is that there are two parts to any product working in the market, and especially true for Indian market, but I think it’s true almost everywhere. Either people go and try aspirational brands. Starbucks was an aspirational brand. McDonald’s was an aspirational brand for that matter. Tim Hortons, you know, stores open up, people queue it up, right? So that’s just aspiration, right? First store opens and you have queues. And second is the education on the food, right? So when you launch a new cuisine. So if you were to do a Mexican restaurant in India today, or other tacos, right? Taco Bell. For example, I was talking to somebody at Taco Bell and I was like, you know what? I am rooting for your success now because Domino’s is selling tacos. Burger King is selling tacos. Almost everybody selling has one item called tacos.

And just because of that, if Taco Bell does their food just right, just decent, you know, good, I mean, palatable food, they’ll win because taco is now becoming a category. And that category is being fueled by, you know, competition. That is the most beautiful thing that can happen to Taco Bell. I feel that Taco Bell in previous years, you know, they’ve been in the market for 10 plus years at least, right? They were struggling not because they were bad food or a bad brand. They were struggling because of what exactly what I was alluding to, you know, in case of Wendy’s. Indians don’t know Taco Bell. I mean, they didn’t know Taco Bell. I’m talking about 10, 12 years back. And they didn’t know tacos. And they didn’t know Mexican food. And they didn’t care. So who will educate them? And who will create that brand recognition? My belief is that, you know, as an outsider, when you launched Wendy’s and I saw, you know, the first store. Was Cyber Hub your first store?

 

Jasper Reid:

No. Sector 29 in gurgaon. And we had a line. We had a queue..

 

Ashish Tulsian:

No, no. But Cyber Hub was the second? 

 

Jasper Reid:

Second. Second store.

 

Ashish Tulsian:

So I remember watching that Cyber Hub store getting set up. You know, I was just, and my reaction was that, oh, wow, I know Wendy’s. My reaction was also beef, by the way. I was like, okay, so is Wendy’s going to serve Aloo Tikki? Separate problem. But my reaction was that this will be interesting to see how Indian audience react to this. Because how many people here exactly know what’s Wendy’s is a question that I was really curious about.

 

Jasper Reid:

Nobody does. But nor did they with McDonald’s, right? You talk to Vic from RMS, right? When they brought McDonald’s in the 90s, they’re the same issue. 

 

Ashish Tulsian:

I mean, in the 90s, yes. First 10 years of McDonald’s, that’s what I’m saying. They heavily, they did ATL. They did heavy advertising. But I think McDonald’s, I still feel McDonald’s, Starbucks, Subway, these kind of brands, they still thrive because of one reason. When Indians travel abroad, literally every country has these brands, right? So McDonald’s, Starbucks, Subway.

 

Jasper Reid:

Yeah, well, there’s degrees, right? So maybe Burger King is a better example, right? So Burger King, had all Indians heard of Burger King? No, right? They’re a big global brand. Honestly, my view on this is, there’s only a few. If your name is Nike, Starbucks, Apple, good for you. Then you’re everybody else. Then you’re everybody else.

And my hard-nosed view on the awareness thing is it’s point of sales, right? You can faff around. The amount of time we said, I mean, Wendy’s was funny because tons of people come up to me in Delhi and they’d say, I’ve always loved Wendy’s, right? And then almost the next thing they’d say is, I used to love your store in Connaught Place. Of course, they’re talking about Wimpy’s, right? 

 

Ashish Tulsian:

Oh!

 

Jasper Reid:

I was fine on that because I even had one guy came up to me and said, I really, really like your kebabs in your place in Connaught Place. I was thinking, how does that work? He’s talking about Venga’s, right? Now, whether it’s Venga’s or Wimpy’s or Vindy’s or whatever, I don’t care. I mean, I’d rather have that than after a while they’d say, yeah, no, it’s great because they gave me some. But going back to the matter in hand, you get your brand awareness by having enough sites. And you get there. 

 

Ashish Tulsian:

I hear you. 

 

Jasper Reid:

You get there. And the problem with the model, you and I were talking while we were warming up about your friend’s $350 Indian diner model. The benefit he’s got, he’s got a margin, right? 

 

Ashish Tulsian:

Yeah.

 

Jasper Reid:

So the problem with the QSR game is, and this is globally, this is the model. It’s not different to India. You start at almost no margin, right? Then when you’ve got hundreds of sites, you’re kind of getting up to 10%, 15%. And then, and Amit Jhaji is a good example of this down in Bombay, you know, McDonald’s South and West. Once you get over a certain size, so now that Amit’s average unit volumes are over about, they’re not far off, five crores per unit. Your model then, you make cash like a bandit, right? But that’s 30 years. And here’s the other part of it. Here’s the other part of it. Because, you know, there’s just almost everything that I’ve learned is no money, no honey game, right? Who funded McDonald’s in India? McDonald’s. 

 

Ashish Tulsian:

Yeah. 

 

Jasper Reid:

McDonald’s. And actually, they were very, very smart because what McDonald’s recognized, they don’t do that model anymore. What they recognized at the time was they would team up. So, Ashish and Jasper would get together and we create, you know, you know, McCorp Private Limited, our vehicle. And, you know, we’d be drinking champagne saying we’ve got the rights to McDonald’s, right? What they know though is you and I raise money. And the same thing happens everywhere. It’s after 10 sites, the champagne’s been drunk. You and I are fighting. You’re saying to me, this is the worst model on earth. I’m saying give it more time. We’re all saying, why is our margin like this on our burger tikki? It’s a disaster. Let’s change it. And McDonald’s knows that that’s not the time to panic. They know you’ve got to stay the course to hundreds of sites.

That’s why they used to use their balance sheet, which they don’t use anymore. And, yeah, listen, that’s, for me, it’s a bit of a metaphor for the Indian market in the sense that I’m slightly skipping towards the end of my story here, but what works in India? Long, patient, with loads of capital. By and large, that works. What doesn’t work in India is short. It’s the opposite. It’s the opposite.

 

Ashish Tulsian:

Yeah, there’s not a high burn, you know, go big, go home sort of market. It’s a slow burn. You need to stay. And that doesn’t apply only to the restaurant business. I mean, I think it applies to everything. It applies to my business.

 

Jasper Reid:

Everything. And look at Starbucks, right? So I know how their tax structure works in India, but they don’t, you know, if it’s you or me, we’d be sitting around crying ourselves to sleep that our business, despite the scale, was hardly making any money. But if you’re, you know, if you’re the target group, A, you’re long, long, long. B, you’ve got the opportunity to offset tax losses here and there. I don’t know how that works. I’m not into their tax. But they’ve got, they’ve got the right, the right setup. Right. So you can sit there at any time and go, oh, no, Starbucks is a disaster. Blue Tokai are taking over. That’s not how it works, right? 

 

Ashish Tulsian:

Yeah. 

 

Jasper Reid:

Hundred year game. Trust wins.

 

Ashish Tulsian:

How was the journey with Jamie’s, right? So I think you took on two battles, as you also said, right? Establishing a burger brand, a not known international burger brand in India and a British, you know, British chef run, named pizza brand in India. Again, absolutely not known. People don’t know what to expect out of it. And when Domino’s is the baseline, Domino’s and Pizza Hut is actually the reference line of what pizza is. Most of the Indians have had their first pizza at a Domino’s or a Pizza Hut, right? So they have a certain view of what pizza is. What was life like? And, you know, how was that journey?

 

Jasper Reid:

So we saw Wendy’s, right? It’s Rebel Foods. They seem to be growing it. Inshallah. Fingers crossed. I think it will work. It will work over time. So we feel good about that. And we’re not just forget the Jamie’s thing. We’re not in the business of keeping our brand children. Right. We’re in the business of selling our brand children. Right. And we’re quite dispassionate like that. So Wendy’s deal got done. Eggs did great. Jamie’s. Jamie’s was much easier in many ways because there’s margin. So you’re not you’re not. Well, there’s two things. Right.

First of all, the capital that you need to build a Jamie’s pizzeria, 1,500 square feet is about a crore. Right. Secondly, if you’re doing burger QSR, it’s much more expensive because it’s much more capital intensive because of the equipment. So you’re cooking thousands and thousands of burgers. So capex is more benign because your sale price is 500 bucks a head. Your gross margin is much higher. So your net margin is much higher.

 

Ashish Tulsian:

I’m just curious. What is the difference in the cost capex between a burger and a pizzeria?

 

Jasper Reid:

Pizzerias are brilliant models in the sense that the equipment is a pizza oven and a dishwasher. Right. Whereas in, you know, you have you have double sided grills, fryers, electric, you know, there’s much more. So a pizzeria is a great all around the world because the equipment is very, very simple.

 

Ashish Tulsian:

So 1,500 square feet pizzeria will cost a crore in capex.

 

Jasper Reid:

Yeah.

 

Ashish Tulsian:

1,500 square feet burger joint. Double. 

 

Jasper Reid:

Double.

 

Ashish Tulsian:

Double.

 

Jasper Reid:

Yeah. We got we with Wendy’s managed to get that number down. But if you’re if you’re building a McDonald’s now, it’s more like three crores. Yeah. 

 

Ashish Tulsian: 

And you’re saying a large part of that is equipments. Yeah. A lion’s share is equipment. It’s just big industrial kitchens, brand spec, all kinds of stuff that goes. It’s partly brand driven. It’s partly volume driven. So a pizzeria is much, much cheaper to build. Higher gross margin. So you’re not you’re under less pressure from day one. When we launched, it took off quite quickly. Right.

So this is talk about the brand thing. So who’s heard of Jamie Oliver? A few upscale people that live in, you know, Jawbar or Bandra or, you know, smart neighborhoods in the big cities. It’s funny. Every time, every time I open a Jamie’s restaurant, at least 20 people, Ashish will come up to me and say, hi, Jamie. And I initially correct them. But then a bit like the vendors, Wendy’s, Wimpy’s thing. Right. I thought, hang on a second. I’m shooting myself in the foot here. All I really want. All you really. So what are you buying into? You’re buying into something that’s foreign. Right. Yeah. I have one superpower in India, which is I think other than Burt at California Burrito, I’m pretty much maybe some guys in Goa. But I’m pretty much the only white faced restauranteur in the entire country.

 

Ashish Tulsian:

I only knew you, by the way. I got to know about Burt. Yeah. Recently. I haven’t met him. 

 

Jasper Reid:

It’s Jasper and Burt. It’s like, you know, it’s like Laurel and Hardy or something. But, you know, there is an advantage because, funnily enough, when you stand there, people think you are the brand. Hmm. Because they think, because otherwise the psychology is what the hell is this British whitey doing here, right?

He must be the brand. In fact, I actually worked on Wendy’s a lot too. Quite a lot of people believed, particularly investors and landlords, that you kind of wear the brand because you were white. Right. Anyway, that’s a sort of philosophical thing. 

 

Ashish Tulsian:

But, yeah, that’s a great thing. I mean.

 

Jasper Reid:

The game’s hard enough as it is. Right. So I’m grateful. I’m grateful for a little leg up. See, our timing, if you look at things now and, you know, you know this, there are gazillions of good quality pizza guys around India now. They’re cropping up left, right. It’s a classic thing in India, right? One guy makes a little Neapolitan pizza thing. Well, there’s like 10 more within three weeks. But when we started, there weren’t that many. Guys like Amici were there. Smokehouse did a bit of it.

So we tapped into a need. And up until COVID, it went great guns, right? And the pizzeria model, which we had… See, the pizzeria model didn’t exist. We launched it in India. I went to Jamie and I said, I want to do a pizzeria model. And my idea is that if you wake up one day and think, why have I got that terrible feeling in my stomach? And you’re thinking, why do I feel like that? And you remember that you’ve had a Domino’s pizza the night before. You’re my customer. You’re my customer. 

 

Ashish Tulsian:

We’ll beat that out.

 

Jasper Reid:

Yeah. Well, maybe I’ll put it another way. You wake up in the morning and you realize you’ve had a QSR trashy pizza that doesn’t… The cheese is not cheese. And you feel terrible. You’re my customer, right? That’s the moment. This is the sort of come to Jesus, come to Jamie, come to Jasper moment. 

 

Ashish Tulsian:

You didn’t give that away at all.

 

Jasper Reid:

No. Well, anyway, so the idea… We all know this, right? At any given time, there are people that want to trade up to something better, right? For whatever reasons, travel, info, the rest of it. And that worked really, really well. And we got up to 35 sites. And I’ve sold down my investment now. And the business should continue to thrive. Let me tell you… 

 

Ashish Tulsian:

Is it a done deal? You’re already sold?

 

Jasper Reid:

Getting there. Getting there. So where am I overall with this? 35 sites, out of the gate, three or four funding rounds. Not bad, right? Not bad. Not bad. 

 

Ashish Tulsian:

At all. 

 

Jasper Reid:

With an exit. Not bad. Do I believe in the model going forward? I kind of do with the right capital. It used to be something that you could probably get back by private equity. But that’s not going to happen now. Partly because… It’s partly a sentiment thing. Because for every one Jamie’s that gets up… We became profitable as a business. Again, that’s no mean feat. But for every one of those, you know this, there’s 20 that don’t make it. And the restaurant space is very hard to get investment in. I mean, globally, generally. But particularly hard in India. So it fits well, I think. Again, going back to this thing. With someone that’s got some patient capital. Will take their time.

Can focus on the quality. And isn’t… So when we talked before about your friend’s Indian diner. Which would I rather do now from an investment and a scalability perspective? His Indian diner. Does that make Jamie’s Pizzeria invalid? No. It’s just horses for courses, right? And I think you have to believe that… If you’re in it for the long game. Bit by bit. Aspiration will increase.

The flight to quality will increase. The market will remain bumpy. But if you’re prepared to grow it slow and steady.

But our sourcing was impeccable, right? We really held the line on having the best chickens. Higher welfare chickens. The best ingredients. We really, really took that quality seriously. And at any given time. You were often thinking. Am I getting a reward from the customer for this? And the answer. The cold hard answer was very often not, right?

I know I have plenty of people who come to me and go. Your food costs are too high, right? I can get you 5%.

 

Ashish Tulsian:

What were you operating at? 

 

Jasper Reid:

Well, they weren’t bad. Like 28%, right? 28% food costs. Which is fine for me. Depending on what your rent does, right? But could you have got it down to 23%, 24%? Probably. How do you do that?

 

Ashish Tulsian:

Do you think it’s healthy to go down to 20% to 23%?

 

Jasper Reid:

No, I don’t. I don’t. I don’t.

 

Ashish Tulsian:

I mean, you’re a fast casualty.

 

Jasper Reid:

No, I don’t. I have to say. It’s a whole different topic, right? But the amount of junk. So, here’s the problem, right? Because margins are so tight in this market. Because it’s so competitive. And the market’s maturing. And top lines are, you know, there’s very stiff headwinds.

It has a huge impact on quality, right? Because the amount of people. So, we held the line. Frankly, well, for a couple of reasons. One, it was a brand requirement. But equally, because ethically, I wasn’t prepared to serve shit, right? But not everybody’s like that. And the truth is, it doesn’t. It’s not like an abstract thing about one ethical guy, one non-ethical guy.

Where the rubber hits the road is management teams who’ve got investors. They could be private equity. They could be promoters. Who turn up and say, what’s this nonsense, right? Get me 4%. I’m going to give you an example.

A brand you’ve mentioned before, which I won’t mention again. I met the promoter recently, right? And he said, oh, I’ve got a brand new management team. I’ve got a brand new management team. These guys are great, right? And after two or three months of analysis, they brought my food costs down by 5%, right? Now, this guy is in a value game anyway. How have they done that? And if you listen to the promoter, you’d think there was some kind of strange Harry Potter-style magic going on. There’s no Harry Potter-style magic going on. They’re adulterating the products, right? They’re putting fillers in. They’re putting emulsifiers in. They’re cutting down this, that, and the other. And, and I do want to say this on your podcast, a combination of that stuff, particularly in the value sector, plus delivery, has had, even in the last 11 years, a catastrophic impact on obesity in India, right? And it’s wrong. And it’s wicked, frankly. Speech over.

 

Ashish Tulsian:

No, you’re right. 

 

Jasper Reid:

I’m trying to breathe in.

 

Ashish Tulsian:

You’re absolutely right. And I think we, on the other side, and I don’t know if it’s trouble to say this, but we are experiencing this on our side as well, where we can see well-run, good brands joined by the new guys who will come with a promise of a magic wand, and then will try to do their magic.

 

Jasper Reid:

Yeah.

 

Ashish Tulsian:

And the magic is mostly squeezing, you know, a dollar out of 25 cents. It looks like that.

 

Jasper Reid:

Yeah, it’s black magic.

 

Ashish Tulsian:

Yeah, but what exactly is happening is that they are hitting, they’re extracting the, you know, the value out of some of the core pieces of their play. Yeah. Right? So somebody, for example, in a pizza or a burger or a sandwich, if you mess with the flour, with the dough, then I’m like, you know what? I don’t think you understand this game enough. Yeah. And you’re messing with the wrong part of the plate. Yeah. Right? And also, nobody in this world has been able to generate desired EBITDA just by lowering costs.

 

Jasper Reid:

No. And it’s death by a thousand cuts, right? And it’s the equivalent, effectively, of putting some crappy old tires on a car, right? Which run the risk of killing someone. It’s just that people don’t see it, right? It’s a weird thing for you, isn’t it? I mean, again, this is pretty…

 

Ashish Tulsian:

But is it?

 

Jasper Reid:

You put it inside yourself. You think you are hypersensitive, but there’s an unending, you know…

 

Ashish Tulsian:

But do you think that this is one of the reasons why a lot of popular, you know, proven models, you know, international brands, when they come to India, they fail? Is this one of the reasons? And I’m not… I mean, of course, we are… 

 

Jasper Reid:

Specifically, Ashish, help me with which particular…

 

Ashish Tulsian:

I mean, I have, for example, seen almost every American, European brand that comes to India does good early years and then starts losing his sheen mostly at the back of the quality of food that they serve.

 

Jasper Reid:

Well, to me, it’s not so much… So, that is a symptom, not the cause, in my opinion, Ashish. The cause, going back to my favorite topic, is people don’t really have the capital.

 

Ashish Tulsian:

I get that. I’m talking about the brands who are well-funded, deep pockets, run by either private equities or large conglomerates.

 

Jasper Reid:

I think… So, I don’t think… I’ll give you the same answer. When people mess around with the food, right, or adulterate it, I don’t think that is the cause of the failure. I think the reason they’re doing that is the cause. And let me explain.

Bottom line, and I know this is kind of blindingly obvious, but the market is soft and growing quite steadily. And what growth has been gobbled up by competition. So, if you look at it from P&L perspective, your top line, trying to get a good top line is super hard work, right? And that’s even before… I mean, it’s such a seasonal, bumpy market. And, you know, we’ve got… if there was a global championship for things that get in the way of your top line, parties, festivals, weather events, demonetization, elections, booze problems, right? We’d be in the semifinals, right? So, it’s a tough top line. You know, if you look at it from a gross margin perspective, you can get a good gross margin because we do have one big benefit here, which is there are lots of good ingredients here. I mean, you know as well as I do, if you’re building a brand in Saudi, you’re importing everything. There’s no…

 

Ashish Tulsian:

Absolutely, there’s no local producers. 

 

Jasper Reid:

There’s no local producers, right? Now, of course, they’ve got much higher APCs. So, getting to the gross margin bit, perfectly doable. At a quality level, there’s some good produce here, right? The problems start beneath gross margin. And you have to keep coming back to this, Ashish. The rents here, the rent to revenue ratios in India are messed up, right? And you’re in this double bind where if you require any form of volume, right? The rent you’re paying is a catastrophe. And it requires a much more detailed conversation about why that is, which is related to cost of capital. It’s related to the principal capital growth in real estate.

It’s related to stuff like India being allowed or promoters in India being able to buy land at auction with debt, which they’re not allowed to in China. There’s a whole bunch of things going on there. But it all results in, you know, per square foot rental rates that are just completely out of whack with the volumes you’re getting, right?

 

Ashish Tulsian:

What do you think are the rental rate percentages by percentage in any other country?

 

Jasper Reid:

I’ll give you an example with Wendy’s, right? With the Wendy’s across America, except seeing that a lot of it’s drive-thru, etc. It’s a different market, right? 4%. If I got mine under 50%… 

 

Ashish Tulsian:

But that’s 4% of the top line, right?

 

Jasper Reid:

Yeah. But, I mean, in India, you say to yourself in Burger QSR that, 

 

Ashish Tulsian:

30-50

 

Jasper Reid: 

yeah, right, but that’s the problem, okay? And, you know, you don’t mind paying it in Ginza or, you know, Broadway or Bond Street because, generally speaking, the rent is indexed with your return, right?

Either because the foot falls there, you get a certain type of customer. But here, you know, there’s so many cases, and we’ve had this happen to us many times, right? It could be Indiranagar. It could be Bandar. It could be Churchgate. It could be Saket. You know, prime neighborhoods where you get it slightly wrong. 

 

Ashish Tulsian:

Yeah.

 

Jasper Reid:

And it’s terminal, right? 

 

Ashish Tulsian:

Yeah, you’re right.

 

Jasper Reid:

It’s terminal. So, you know, you’ll be talking to…

 

Jasper Reid:

I’m not sure there’s enough, there’s not enough margin in the tank, right? And then, because people always, especially for foreigners listening to this, every foreigner misses one key item, which is the cost of utilities, right? You know, I mean, I often say, Americans call me up and say, hey, you know, what’s the utility cost? And it’s often only QSR guys that remember to ask for it. They’re a casual guy, half of them don’t know the numbers anyway. But, and when you tell them it can be 8%, 9%, they sort of, they’re already white, they turn an even whiter shade of white. 9%, it’s like 1% in America. 9% for your power.

 

Ashish Tulsian:

Yeah, but that’s, that’s exactly true for, like, for example, our cost of buying cars and running cars in India is insanely high.

 

Jasper Reid:

Yeah.

 

Ashish Tulsian:

I mean, as compared to any other developed nation.

 

Jasper Reid:

Well, here, I don’t want to sound too gleamy, because you can make it work. It’s just, I’ll go back to my, it’s a hard workout. But if you’re, you know, capital’s not free. So I compete with quite a lot of guys whose daddy gives them the money. I compete with a bunch of other guys whose someone gives them money. But it’s cash.

 

Ashish Tulsian:

I mean, capital’s, capital product, I get it. I mean, I will still, I will, I, and I hear you when you say that, that the bad quality ingredients and what happens to the taste later on is a symptom and not really the causes, you know, something else. Something else starts that domino, you know, where somebody says, hey, let’s cut down the cost, and then it’s a rabbit hole.

 

Jasper Reid:

Yeah, yeah. But I think there are, I’m going back to the Jamie story. I mean, if I sum the whole thing up, right, I mean, would I do it all again, right? Would I do it? Yeah, I would. I would. Would I do restaurants again? Maybe not. Have I learned a tremendous amount by doing restaurants? Because they touch all sorts of stuff, right? And they are interesting business in the real estate. 

 

Ashish Tulsian:

Are you sure you wouldn’t do restaurants again?

 

Jasper Reid:

I might. I’ve got a lot of people after me to do projects. But I would do, I’m skeptical about international brands. I’ll tell you why. And this is sort of an important observation. I think the greatest F&B brands in India will all be of India, by India, for India, right? There will always be a market for, you know, if Chick-fil-A turns up or Chipotle turns up, are people going to go to it? Probably, right? But what do I think has more value, and what would I like to do? I’d like to build my own business, right? I think owning your brand, being a proper, you know, I mean I’m practically Indian now in lots of ways, right? I might not look Indian, but I would build my own brand every time, right? And, in fact, I would probably do it in the Indian space, which sounds a bit weird for a gora to even dare to do that.

 

Ashish Tulsian:

But let’s, let’s, let’s. I would do that. Let’s, you know, click on it a bit, right? The misconception, you know, so many times, you know, aspiring restauranters, younger folks will come to me, and they will, you know, almost, they’ll almost pitch or tell me that, hey, you know what, I’m doing this particular fusion or a certain concept, or I’m bringing in this particular item to the country. It doesn’t exist anywhere. Nobody else is doing it.

 

Jasper Reid:

Don’t do it. Slap them around. Make them see sense, Ashish.

 

Ashish Tulsian:

Yeah. And I’ll tell them that, hey, you know, if nobody else is doing it, trust me, you don’t do it. 

 

Jasper Reid:

Yeah. 

 

Ashish Tulsian:

Don’t be the first guy doing it. You will die. 

 

Jasper Reid:

Yeah. Peruvian ceviche. I mean, yeah, right. 

 

Ashish Tulsian:

Yeah, exactly.

 

Jasper Reid:

Yeah. I mean, yeah. And may as well set fire to 500-rupee nights, one after the other.

 

Ashish Tulsian:

Virat Kohli did that Peruvian restaurant. Do you know that? 

 

Jasper Reid:

Where is it now?

 

Ashish Tulsian:

Exactly. It’s not there anymore.

 

Jasper Reid:

But if you’re Virat Kohli, you can afford to, you can afford one or two.

 

Ashish Tulsian:

Yeah, but you know, that’s a mistake. But my question to you is that on the flip side, when they ask me that, okay, what do we do now? If you think Peruvian is a bad idea, then I tell them that, hey, you know, do North Indian. And they’re horrified. They’re like, every Tom, Dick and Harry on the street is my competitor. Why will Jasper look at Indian fare?

 

Jasper Reid:

But I’ll tell you why, right? So no one would debate that, and even here you can’t generalize, but if you just said generically North Indian, South Indian, right, it is impossible to debate that there are bigger Tams, right? In terms of addressable market, it doesn’t get any bigger.

Okay? So everyone would probably take that one. I think after that, then it’s about, and I’m totally with you on this, then it’s a more interesting thing because if people get stuck on this debate around, oh, everyone’s obsessed. I’ve got my biryani. I’ve got my, you know, marijuana chai. I’ve got, you know, my auntie’s favorite Amritsari fish.

That’s, can I say bullshit on the show? Yeah. You know, people will make that excuse. But where I see the opportunity is you’ve got winning stuff. And we talked about Vada Pav before, and we talked about your friend who does, who home bakes a lovely bun, right? And lots of people don’t do that anymore. Right? That is a fantastic product. It doesn’t get any better. The margin’s fantastic. Now, here’s the thing for me, and this is, I think, where the real opportunity is. Along with a lot of other parts of relatively immature Indian industries, most of it’s disorganized, right?

If you bring, and you and I have talked about this, and this is definitely preaching to your choir, you think about it not so much about obsessing about have I got a better Vada Pav or dosa or whatever, right? But you think, I will bring world-class restauranteering and professionalism to this, right? And, you know, funny enough, I wouldn’t do Wendy’s again. But I learned those Americans and their process and their systems and their tech and their endless obsession about this, that, and the other. You take all of that, and you apply that to the Vada Pav guy or the Chola Bhatura, then you’re on to a winner. And then the last thing I’ll say on this, because it’s a favorite topic between you and me, is the other thing that people like Wendy’s and McDonald’s are great at is they are incredible at franchising, right? Now, at the moment, franchising in India is pretty immature. And a lot of people sit there going, I’ll give him my brand, before, you know, I’ll give him Jaspers, and I’ll come back, and it’ll be Jaspreets two weeks later. He’s meant to be serving my pizza. All of a sudden, he’s serving, you know, he’s serving Chola Bhatura or Salsa Khasag or something like that. So I go, well, the devil’s going on, right? Of course, that’s prejudice and bullshit. But what it misses is you talk to a Wendy’s guy about how they franchise, right? It’s simple stuff like this, right? They go into a market, they franchise to you.

They give you a little cluster. You fuck up where you want out, they buy you out. Boom, right? The point here is they have the money to do that. And they know every little layer of it. I used to go, here’s a simple example. I used to go to burger conventions with Wendy’s in Las Vegas, Orlando, right? And originally, I thought, oh, my God, a burger convention, I can’t think of anything more horrifying or boring, right? But you go there, and they do this incredible job of bringing together the global franchisees, and it’s like a massive party. I promise you, you do that stuff in franchising in India, you’d make out like a bandit. So long story short, to all the kids out there, and frankly, I’m slightly speaking myself here, go mainstream. And then the last thing, quickly I’ll say, look at Wingstop and Dave’s Hot Chicken, okay?

Two brands out of America. 

 

Ashish Tulsian:

I’m a fan. Dave’s I’m a fan. 

 

Jasper Reid:

Okay, but why are they so big? Because they are absolutely the King Cobras of digital, right? These are brands for the TikTok generation. And okay, Mr. Modi’s banned TikTok here, but for TikTok, read Snap, Instagram. You take Chhota Bhature, and you do for Chhota Bhature what Dave’s or Wingstop have done with all their rap buddies and TikTok, then you’re in. It’s a great organization, amazing digital focus, classic product.

 

Ashish Tulsian:

I think Dave’s is, I’m a big fan. And I’m a big fan of not only the product, but the velocity. 

 

Jasper Reid:

Oh, my God, their numbers are unreal, right?

 

Ashish Tulsian:

I met them at 30 stores. Yeah. And I met the management team. And the next time I met them, they were at 100. And the next time I met them, they were at 200.

 

Jasper Reid:

Their AUVs are unreal.

 

Ashish Tulsian:

Yeah.

 

Jasper Reid:

And they’ve got a line. This will amuse you. So when I just started in India, I had the exclusive rights for the UK on Wingstop. The other day, that sold for 450 million pounds. 

 

Ashish Tulsian:

What did you do? 

 

Jasper Reid:

I had the rights because I knew that the guy that I had negotiated with on Wendy’s, Larry Kruger, had fetched up as the global COO of Wingstop. They hadn’t done any international. They wanted to use the UK as their base. He and I knew each other. I was just about to move to India, and I negotiated a deal with him to say, give me first right of refusal for a year. But then I came here. So I couldn’t. But whether I would have made the 450 million, I don’t know. But I wouldn’t have missed India. I would have traded that 450 million for my 11 years here, genuinely. Money is money.

 

Ashish Tulsian:

Yeah. I think Wingstop is a great brand. I really believe in the model. But on your point, is it even possible to do a Wendy’s process or the American process for Chola Butter?

 

Jasper Reid:

It’s not even a process, but I think it’s the same principles, right? I think you need a supply chain. And you see, I think it’s interesting because one of the things I learned with burgers, I’m not a Chola Buhatura expert, right?

 

Ashish Tulsian:

My question is more nuanced here. I think Indian restauranteurs are coming of age. I think Indian in the QSR industry was almost non-existent a decade back in the true form.

We used to kind of flirt between or confuse between a fast casual to an upended fast casual to a fine dine, right? So now the lines are kind of thickening. And now you can say that, okay, this is a fast casual, this is a fine dine, and this is a QSR. I see that the struggle to scale is real. And every Indian restauranteur specifically is now trying to figure out and trying to undo whatever process debt left behind while building 20 stores, 30 stores, 50 stores. And most of the times I see there are so many brands I know in the market right now who are stuck at 50. The problem with getting stuck at 50 is nobody can tell you that you are a dud. Exactly. And you are not able to scale further. What are your key learnings? And then when I say Chola Butter, I mean, do you even believe that Indian QSRs can apply American process QSR principles?

 

Jasper Reid:

I really don’t see why not, right? Because, you know, again, it’s not an abstract thing. 

 

Ashish Tulsian:

Yes, a few anecdotes will help.

 

Jasper Reid:

I tell you, here’s some very simple things. So what’s at the heart of any F&B restaurant is a menu, obviously, right? Now, the tools that a Wendy’s has, the digital tools they have around building a menu are astonishing, right? 

Ashish Tulsian:

Like what? What do you mean by that?

 

Jasper Reid:

These are effectively very well-developed Excel-based models that will allow you to look at every single permutation of a menu and every little ingredient that goes to it. And it’s not a complicated piece of technology because it’s based on pivot tables. And essentially, it’s very easy and quantitative to understand. But very few people use them, Ashish, right? I was with some London restauranteurs the other day, really well-known restaurant.

 

Ashish Tulsian:

Is it the Swiss software that you’re talking about? 

 

Jasper Reid:

No, it’s an Excel-based thing, but it’s come out of the Wendy’s system where effectively they have built – this is sort of something that people can understand. So getting every bit of data through that model from effectively farm to fork, working out the ingredients, the portioning, the pricing models, all the different scenarios, etc., is intrinsic to the trade, right?

But I promise you – and this actually applies in lots of countries – if you speak to 10 restauranteurs about how they do that and do they use those types of tools, nine will say no. Yeah, yeah. So whether your product is Chola Bhatura or Dave’s Hot Chicken, it doesn’t matter.

The QSR guys will bring that type of rigor and thinking, right? Second example, okay? Trade area analysis, right? Everybody knows, even my – even Quince, my Labrador retriever dog, knows that it’s location, location, location, right? And if I said, you know, Quince, what is it? She’d bark. Anyway, so everybody knows that, right? But how many people use advanced QSR techniques when it comes to trade area analysis and site selection? Very, very few, right?

And we live in a technology age of geo, of all kinds of datasets that can be put together, and all of that matters, right? But nine out of 10 restauranteurs will go to a JLL, walk around the block. If they’re lucky, they’ll see it a few more times, talk to a landlord, have a haggle, and then by some strange Lord of the Rings jiggery, you know, kind of hocus-pocus, make a decision. The models that these guys, an advanced QSR business have are unreal. 

 

Ashish Tulsian:

Yeah, yeah, absolutely. 

 

Jasper Reid:

And they’re getting better, and now they’ve got AI, large language models, all kinds of shit.

 

Ashish Tulsian:

We have customers outside, and not only in the U.S., even in the Middle East, who are using, you know, spatial data, you know, to see the density of population. Absolutely. Layering it up with multiple, you know, sources of data to really triangulate and say, this is the density I want to be in, and this is not my place.

 

Jasper Reid:

Well, and I tell you where we’re slightly getting to on here, which is a bit, but it’s a kind of interesting thing about restaurants. So, who creates restaurant brands? You know, they’re typically creative, entrepreneurial people. They could be chefs, though that’s normally a bit of a disaster, right? You don’t want to let, don’t let a chef anywhere near the P&L, in my opinion. But, and actually, funnily enough, you do need to be creative to start these things and create the brand. 

 

Ashish Tulsian:

Sure. 

 

Jasper Reid:

But pretty much everything else, you’d be better off having engineers in charge of it. I’ll tell you what it’s a bit like. Do you remember in the old days, before fly-by-wire and these modern jets, what you’d do is you’d get someone from the Indian Air Force or the Australian Air Force or the U.S. Air Force who were ex-fighter pilots? Or they’d done crop dusting, and they, you know, they, and what you hoped for was they were old enough that they’d had all the, you know, the testosterone had dropped, right? Now those are the last people you want.

They’re the last people you want. You want basically a couple of IIT engineers in your cockpit because all they’re really doing is looking at data. So, you know, in essence, that’s the opportunity is. And here’s the great thing about Chole bhatura, right? That brand, the name itself is so established. You don’t have to create the brand.

It’s there. And even on, even I’m making this up, but where there is a big opportunity, and it goes back to that thing around people messing around with quality, make a really lovely Chole bhature, right? Don’t believe this hype about, oh, my auntie’s Chole bhature, this, that, and the other. Actually, again, look at the ingredients. Look at your supply chain. Get the, you know, get the best pulses. Think about the water you’re using. Think about that. And in that product, it’s a bit like pizza. It’s a brilliant product because there’s nothing, there’s no expensive ingredients in that. No, unless you start to have truffle Chole bhatura.

 

Ashish Tulsian:

Just for my, you know, kind of a last bit on this. I’m 100% sure that you’re doing a restaurant again, for sure. I think it’s a drug. It’s a drug. I think restauranters are restauranters because they are these people who don’t like easy life. So if somebody gives you that easy life, you will run away from it and you’ll dive back into the game.

But if you had to think about it, if you don’t mind spilling the beans, the secret, if you had to make or build Jaspers this time, what will that menu look like? And what are the two or three things that you will do, you know, for sure this time around building your own brand?

 

Jasper Reid:

So menu kind of categories without. So Desi Cafe, Desi Diner. I like that space. Longer debate around exactly what. So anything I do needs to be simple. I think the wrong things to do is have long menus. That’s a really important thing. So if you could build the 30 item Desi Diner, I think that’s a great space. I still like the fried chicken space. I wouldn’t mind having a go at that. I like. I like certain things like kind of. Really simple bakery, deserty, crumble, cream. I like those kind of things. Oh, well, they all have in common is they’re all quite simple. I love the idea that a Gora guy could great gate crash the Desi market. And there’s no reason. There’s no reason.

 

I mean, if a whole bunch of Bangladeshis can turn up in the UK and create the Indian restaurant industry. Or if Jamie Oliver, a British guy, can gate crash the Italian market. I don’t see why Jasper Reid, Anglo-Irish can’t.

I like the idea of that. But then the last thing I’ll say, and I do want to get this point across is, I think the thing that will define brands going forward is the thing that defines any brands is people. And the biggest single opportunity, and I do think we did a good job of this at Wendy’s and Jamie’s, is your culture. You know as well as I do. And it’s an international problem. And the way chefs work has sort of become a bit of a joke in some ways.

But where we won in our business is we won because we really loved our people. And our people really loved our customers. And that could be a guy that was trading out from his 15 rupee chole bhatura to buy my butter tikki, the award-winning 29 rupee butter tikki.

or they could be a sophisticated customer coming to a Jamie’s. But I think going back to this thing, and then I’ll sign off, but for people building food brands of the future in India, right, there’s that process thing we talked about, the money thing we talked a lot about. There’s that menu clarity. But if they can also bring egalitarian culture, meritocracy, loving your staff, not giving them the dunder all day long, right, those guys will win. Those guys will really, really win.

 

Ashish Tulsian:

And do you see any brands in India doing it right?

 

Jasper Reid:

I don’t see many chains who genuinely have great culture because I think so many of them are locked into either promoter-driven or command-and-control, very hierarchical stuff. You know, it’s India, right? That’s not going to go away in a minute. I don’t see many. I have to say, if I take guys like Starbucks, I think they do seem to have a nice culture. It comes across nicely. It’s funny. You know when they ask you for your name? 

 

Ashish Tulsian:

Yeah.

 

Jasper Reid:

Originally, I used to struggle with that because everyone would check it. I’d say Jasper and people would go, ah. And then I went to, I think I said Jay. That was easier. Normally, I get my coffee when I’m getting an early morning flight, so I’m quite annoyed to be getting into this anyway. But then I latched on to a good thing was when they asked me my name, I said Jaspal. And that created so much hilarity. And I’ve been riffing off that recently. I tried Jaspreet the other day. That caused even more amusement.

 

Ashish Tulsian:

Yeah, do you know that you have a full name, Jaspreet? Yeah. If you say that fast, it’s Jaspreet.

 

Jasper Reid:

It’s Jaspreet. And they’re looking at me thinking, he’s a funny-looking surdy. What kind of a surdy is? He’s a cut surdy, but he’s also a white surdy. Maybe that’s the thing.

 

Ashish Tulsian:

Yeah, you should start telling people that you’re Jaspreet and you went to Canada when you were quite young. And you magically turned white.

 

Jasper Reid:

Well, do you know what it’s a bit like? It’s a bit like that Nick Baker guy. 

 

Ashish Tulsian:

I haven’t met him, but I know about him.

 

Jasper Reid:

No, no, but it says Nick Baker, a baker from Australia. Yeah, yeah, yeah. And you think, and that’s where you think, you think some guy called Nicholas has turned up. Because really, it’s Nickel. And he did, and he went and did. But it’s sort of a surprisingly, so maybe that’s right. I can turn up and re-engineer. You never know. Hey, India, land of opportunity, right?

 

Ashish Tulsian:

Jasper, this was an absolutely brilliant conversation. And thank you for spilling a lot of beans of wisdom. Thank you for bringing Wendy’s and Jamie’s to India. If it was not for your craziness, I don’t think these two brands might have landed in India anytime soon. Definitely not in the timelines that you brought them in. And congratulations on completing the circle with both Wendy’s and Jamie’s now. I am 101% betting on the fact that you’re not going to keep your life peaceful and you’ll be back on the horse sooner than you believe. And that is going to be a horse named restaurants and food industry again. But it was an absolute pleasure to have you. Thank you. 

 

Jasper Reid:

Pleasure is all mine. Thank you, Ashish.