INTRODUCTION

1.1 Overview

2 Chai Sutta Bar(CSB) is one of the growing start up in Food Venture industry of India started
in 2016. Within a short span of time it spreads over 25 cities with more than 60 stores.
Company is looking forward to establish its presence in tier 2 and tire 3 cities. Strong R&D
department is the key part of their success. They check more than 50 condition including
weather condition of the city before opening any store. There are more than 12 new stores
already lined up which is going to be open in north India. Making the brand more visible
company is planning for campus outlets in college campuses. They have more than 100
menus in different stores as per local people preference.

3 How this journey started

4 Anubhav Dubey a 22-year-old boy who belonged to a middle class family and was
preparing for UPSC exam started Chai Sutta Bar with his friend Anand Nayak since they
always wanted to start a food venture of their own. Later their friend Rahul Patidar also
joined them and team became stronger.

5 Their idea was to serve Indian tradition on the bar table by serving authentic chai and coffee.
It was started in Indore in July 2016.

6 Because of the uniqueness and high quality taste the venture got famous and within just a
span of year many more outlets were started. Today, we are successfully running 66 outlets
all over India with great service.

7 Vision of the company

8 India is a fast changing, fast paced and fast developing nation and we at Chai Sutta Bar
want to grow with our country. We want to reach a myriad of places by opening at least 200
outlets to fulfil the demand of hygienic chai. We would start the contribution to upliftment of
people from our own outlets by motivating people who work with us.
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11 We picture a youth which knows no „sutta breaks‟, only hygienic and eco-friendly „chai
breaks‟!

12 Mission
13 Our mission is to become an inspirational food venture where goodness of Indian tradition is
served on the bar table by providing high quality hygienic beverages in Kulhad at affordable
prices.

14 We want to expand Chai Sutta Bar all over India by opening at least 200 outlets to fulfil the
market demand of hygienic tea which would not only motivate youth to reduce cigarette
consumption but also it will uplift the people who work with us.

15 Why CSB?
16 Unique concept: – We invite all our customers to become saviours of mother earth aswe
serve chai in a kulhad. Moreover, the chai stays steaming hot, be it summers or a bone
chilling winter!
17 Great taste : – Be it after a 4 hour lecture or a tiring day at office, we all have a 4 pm chai
break. What makes it even more fun is that we use high quality milk and the best authentic
ingredients to help you savour the goodness of chai!
18 Eco-friendly : We at Chai Sutta Bar understand our responsibility towards MotherNature
and make sure we fulfil it each day with every eco- friendly kulhad of happiness that we
serve to you!
19 Many Varieties: – Is it masala chai or elaichi ? or would you prefer some ginger or arose
chai? well then, how about a sweet kulhad of chocolate chai? we at Chai Sutta Bar have a
chai for every mood!
20 Smoking prohibited: At Chai Sutta Bar, it is our priority to take care of our customers and
so, smoking is prohibited at every outlet of the Chai Sutta Bar. Instead,indulge yourselves in
the mesmerizing aroma of fresh chai leaves or the tantalizing taste of a refreshing kulhad of
chai!
21 Fast and best service :Good things take time… but we at Chai Sutta Bar don‟t keep you
waiting! Our happiness is providing our customers with the best service!
22 Customer friendly staff

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25 Great Ambience: Chai Sutta Bar has the best of chai time playlists and ambience to
complement your experience!
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30 (Fig. 1)

31 (Fig. 2)

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ndustry profile

Tea and coffee are one of the oldest organized industries in India. With total global
production of tea surpassing the 4 billion kg mark, India has contributed 1 billion kg
of tea. Black tea production registered a CAGR of 1.6% and its consumption at 2.3%.
Indian tea exports have not progressed much due to increase in global competition and
deteriorating quality of Indian tea. Nevertheless, tea has continued to bring in foreign
exchange to the country and generate employment owing to its labour intensive
operations, especially for women since tea leaves are plucked by women only. India,
contributing about 30% to the global tea production, stands to be the second largest
producer of tea with a market size of over INR 100 billion and the fourth largest
exporter of tea with almost over 75% of its production from the organized sector.
There are two major types of coffee – Arabica and Robusta. Over 170,000 coffee
farms mostly spread over the states of Karnataka, Tamil Nadu and Kerala produce
over 90% of total coffee in India. Although the past decades saw majority of resources
in Arabica, Robusta has taken over coffee producers‟ interest due to higher yield and
better usage. Arabica is a milder blend of coffee, grown in higher altitudes as
compared to Robusta that is suited to warmer climates in the range of 20 to 30 degrees

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Celsius. Coffee is predominantly an export-oriented commodity unlike tea that is

mostly consumed domestically. The major producers of tea and coffee are Tata Global
Beverages, Dhunseri Petro and McLeod and together they capture a little over 50 % of
total market share of sale of tea and coffee.

India takes pride in the variety of tea offered – Green Tea, Darjeeling Tea, Assamese
Tea, CTC (Crush, Tear and Curl) and the like with most of it being manufactured in
Darjeeling, Assam and Nilgiri. Exports would remain flat since most of the tea
produced is consumed domestically. More than 90% of Indian households are regular
tea drinkers. The 12th Five Year Plan has allotted INR 2 billion to promote small scale
tea growing sector. Subsidies are introduced by the Tea Board to encourage micro and
mini tea factories, subsidize transportation of products and rejuvenation efforts for
orthodox tea. India sells its tea through an auction between brokers and buyers. The
chart below illustrates the entire process. In 2015, due to heavy rains and late arrival
of product, tea prices at auctions decreased which was favourable to customers.

Tea and coffee are one of the oldest organized industries in India. With total global
production of tea surpassing the 4 billion kg mark, India has contributed 1 billion kg
of tea. Black tea production registered a CAGR of 1.6% and its consumption at 2.3%.
Indian tea exports have not progressed much due to increase in global competition and
deteriorating quality of Indian tea. Nevertheless, tea has continued to bring in foreign
exchange to the country and generate employment owing to its labour intensive
operations, especially for women since tea leaves are plucked by women only. India,
contributing about 30% to the global tea production, stands to be the second largest
producer of tea with a market size of over INR 100 billion and the fourth largest
exporter of tea with almost over 75% of its production from the organized sector.
There are two major types of coffee – Arabica and Robusta. Over 170,000 coffee
farms mostly spread over the states of Karnataka, Tamil Nadu and Kerala produce
over 90% of total coffee in India. Although the past decades saw majority of resources
in Arabica, Robusta has taken over coffee producers‟ interest due to higher yield and
better usage. Arabica is a milder blend of coffee, grown in higher altitudes as
compared to Robusta that is suited to warmer climates in the range of 20 to 30 degrees

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Celsius. Coffee is predominantly an export-oriented commodity unlike tea

that is mostly consumed domestically. The major producers of tea and
coffee are Tata Global Beverages, Dhunseri Petro and McLeod and together
they capture a little over 50 % oftotal market share of sale of tea and coffee.

India takes pride in the variety of tea offered – Green Tea, Darjeeling Tea,
Assamese Tea, CTC (Crush, Tear and Curl) and the like with most of it
being manufactured in Darjeeling, Assam and Nilgiri. Exports would remain
flat since most of the tea produced is consumed domestically. More than
90% of Indian households are regular tea drinkers. The 12th Five Year Plan
has allotted INR 2 billion to promote small scale tea growing sector.
Subsidies are introduced by the Tea Board to encourage micro and mini tea
factories, subsidize transportation of products and rejuvenation efforts for
orthodox tea. India sells its tea through an auction between brokers and
buyers. The chart below illustrates the entire process. In 2015, due to heavy
rains and late arrival of product, tea prices at auctions decreased which was
favourable to customers.

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1.3 Company profile

About the company

Company Name- CHAI SUTTA BAR PRIVATE LIMITED

Age of Company- 2 Years 3 Months

TAGLINE- #YAARMERAKULHAD, #CuddleTheKulhad

Owners/Directors-

1. Mr Anand Nayak (DIRECTOR & Co-Founder)

2. Mr Anubhav Dubey (DIRECTOR & Co-Founder)

3. Mr Rahul Gothi (Managing Director)

Company Background

Chai Sutta Bar established in 2016, it is a Chain of Quintessential Cafes originating in

Indore and now spread across different Cities. Currently operating at 16 locations across
the country our little piece of heaven serves freshly brewed tea, coffee and a lot more. It
was started by Anubhav, Anand and Rahul.

Chai Sutta Bar not only focuses on providing quality products in the cafe, but also
ensures that every incoming customer has the best experience. This is a fast-growing
premium coffee network!

They have recently opened an outlet in Dubai and also trying to open in other countries
also. For that, they are focusing on Nepal, Kenya, Australia, New Zealand, Egypt, UK,
Saudi Arabia.

They want to reach a myriad of places by opening at least 200 outlets to fulfil the demand
of hygienic chai.
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Their Vision is no „Sutta breaks‟, only hygienic and eco-friendly „Chai Breaks‟ for
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youth. For getting a Chai Sutta Bar franchise the following are required-

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For opening a franchise of this brand an area of 80-2000sq ft. is required at

any high street or any commercial place.
The total franchise fee is INR 6 Lakhs.
Total cost of opening a restaurant may vary but the average cost which is incurred
is INR 15 Lakhs.
As per the current running franchise the payback time is 1 year 3
months. Average ROI is 108%
Average term for the agreement is of 5 years.

Outlets of Chai Sutta Bar- Region wise

North- Delhi, Haryana, Punjab, Uttar Pradesh
South- Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana
East- Assam, West Bengal, Odisha
West- Gujarat, Rajasthan, Maharashtra, Go

Why Chai Sutta Bar?

Unique concept: CSB has developed a unique platform for delivering Kulhads tea
to its customers. Also, the tea stays warm, either in summer or in winter. This is
one of the main reasons for their success, as well as the correct implementation of
the idea.
Eco-friendly: Chai Sutta Bar understands our mothers very well and ensures that
they are able to cater to every day with all the fun of the environment we serve!
Variety: Masala Chai, Elaichi Chai, Paan Chai, black coffee, cold coffee, black
cofee,
Tulsi Chai and more. They offer tea of any kind and taste.
Great Ambience: Chai Sutta Bar has the best of chai time playlists and
ambience to complement your experience!
Prices: Providing high quality at an economic cost; a wide range of world-class
products at an affordable cost. They are also offering delivery of food beverages
at low cost.

Customers

They picture a youth which knows no 'sutta breaks', only hygienic and eco-friendly 'chai
breaks'! and almost 75-80% of the footfall are mostly youth. The ambience of the9Chai
Sutta bar attracts youth peoples, it gives them the feeling of “Providing Teas in Kulhads
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at Bar”.

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The average footfall is 70-80k per days across all the outlets. Now they are also focusing
on How to attract the other age groups, so that they can expand their business as soon as
possible.

Products

Chai, Hot Coffee, Cold Coffee, Shakes, Fruit Shakes, Ice Tea, Ice Crushes, Maggi,
Sandwich, Bites, Frappe, Pasta, Mocktails, etc.

How has Chai Sutta Bar journey been till now?

For beginners, this is often a problem with learning to travel. But over time, they have
gained popularity, and people have shown us better responsibility for their unique
functions and for providing better products at lower costs. And they begin to transfer the
franchise to others in 2018, after the founding of the company. Indians are very happy
with their goods and services. Then they moved to other cities, including Ujjain, Bhopal
and Mumbai. Her ambition is to reach out to other places by opening 200 customer
service departments to enhance the beauty of the home.

How Csb is different from other players in the Rapid changing industry?

Kulhads. From Indore to Delhi, they bought kulhads, probably anywhere for their
company. They have always wanted to make our brand unique, which has become one of
their favorites. In the first phase, the Chai Sutta Bar was able to sell 4000-5000 Coolhad
daily, and thus they have an average of 80,000+ sales a day. Its main purpose, from the
very beginning, was to provide integrated services. Their product starts at 10 dollars,
including the different types of tea they are trying to provide here.

Uniqueness of their Brand

Csb is focused on providing employment opportunities for those in need, as well as high-
wage workers who are orphaned, disabled or poor. He also offers them free education, free
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access and free food. They built a space like a bar with drinks and cigarettes. In fact, guests
visiting partners who have served their facilities can enjoy the taste of health at the same
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time. They are trying to create a non-toxic environment in which vegetables are served.

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Comparison with its competitor

Chai Shai Bar

Tagline- KARLO KULLAD SE PYAAR

Chai Shai Bar was established in 2019. Their mission is Providing High Quality food to all
food lovers at an affordable rate.

Chai Shai Bar has 8 outlets in Jabalpur: Viay Nagar, Manas Bhavan, District
Court OMTI, Civil Line, Samdariya Mall, Jhonson Tower Narmada Road,
etc.

The other outlets are in Bhopal, Chindwara, Ratlam, and Rewa

Competitive Advantage of Chai Sutta Bar over Chai Shai Bar

Chai Sutta Bar has a competitive advantage over them because of the following
reasons: Unique concept
Well Known Brand
Some outlets providing teas in 2 different sizes i.e., Regular and Jumbo
whereas Chai Shai Bar provides only Regular size kulhads.

Competitive Advantage of Chai Shai Bar over Chai Sutta Bar

Chai Shai Bar has a competitive advantage over Chai Sutta Bar because of the 3
reasons; Prices are low, and
Dealing in wide varieties of Products
Only outside sitting concept is there in Chai Sutta bar whereas Chai Shai Bar near
Wright Town offers outdoor as well as indoor seating arrangements, which guests
can choose as per their comfort.
Chai Shai Bar will start their own delivery and it will be their next move after corona.
Currently, they are connected with Zomato and Swiggy. The main origin of Chai Shai
Bar is Jabalpur, so Chai Sutta Bar should have focused on Jabalpur outlets. As there is no
Outside seating arrangement in Wright Town Outlet off Chai Sutta Bar, it should also be
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there for better environment. As of now, Chai Sutta Bar is at the peak level as compared
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to Chai Shai Bar.

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Comparison of Chai Sutta Bar Vs Chai Shai Bar

Particulars Chai Sutta Bar Chai Shai Bar

Established 2016 2019
Incorporated Yes(2018) No
Brand Outlets 66 12(3 in Pipeline)
Origin Indore Jabalpur
Investment 15-16 L 10-12 L
Area Required 80-2000 sqft 100-2000 sqft
ROI 108% 110%
Agreement tenure 5 Years 7 Years
Profit Margin 35-40% 40-50%
INR 5 Lac/- (Plus Taxes),
Café(Metro)
Franchise Fee INR 6 Lac/- (Plus Taxes)
INR 4 Lac/- (Plus Taxes),
Café(Non-Metro)
Royalty 2% of Sales net of taxes 2% of Sales net of taxes

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1.4 SWOT Analysis

This is a very short to the point SWOT analysis of Chai Sutta Bar made by Bhardwaja Simhadri from Hyderabad. I am a
2nd year law student from Nalsar law university but my love for entrepreneurship, business and Chai Sutta Bar has
pushed me to learn SWOT analysis from YouTube. If you can't read the whole article read Weakness and Opps only.
Strengths
 Employee loyalty. One of the biggest problems F&B companies face is the problem of staff. The problem with the
staff is they switch very quickly. By hiring only those people who have been previously overlooked by society, CSB
has created a strong emotional bond with its employees. Committed human capital can act as a powerful source of
competitive advantage.
 The wide product portfolio allows the organisation to expand the customer base and offset the losses from one
product category with benefits obtained from the other.
 Customer loyalty. High product quality has increased brand loyalty and customer retention which has overall
helped CSB’s performance in a competitive market.
 Completely Bootstrapped. CSB has not raised additional capital from external funding thus there is no external
pressure to double the money of investors. On top of that CSB is debt-free so there is no interest that is to be paid
which helps maintain the cash flow.
 Strong online presence on different social networking sites and efficient social media management has enhanced
the effect of positive e-WOM and helped develop strong relationships with customers.
 The geographic presence in different regions acts as one of the major strengths of the organisation. It helps the
business’s reach to the target market and ensures more visibility.
 Weakness
 The major target market of CSB is students and people aged between 15-35 and thus this strategy has alienated
other sectors of people and often these alienated people have more purchasing power. This leads to reduced
Revenue Per User (RPU).
 Lack of online presence. In most cities like Hyderabad, Chai Sutta Bar is not available online on Swiggy or Zomato. In
the online space companies like Chai point are killing it by selling Chai in 1 litre or ½ liter Cartons that can retain
heat for upto an hour.
 No presence in B2B. Not selling directly to offices is another place where Chai point is leading as they have secured
contracts to serve large companies during their Chai breaks on a daily basis.
 Most CSB are indoor seating spaces and have no Standing Outdoor tables. This leaves out customers from
corporate backgrounds who don’t have a lot of time to spend.
Opportunities
 Selling online. CSB can increase its revenue by pivoting from the traditional retail sales to hybrid version where they
can sell both in stores and online by using heat retaining Cartons.
 CSB kiosks. In my opinion CSB should start setting up small kiosks with a limited menu within college canteens
where they can serve chai during break hours and to the staff. I believe this gap for chai in colleges can be filled by
CSB. This can help increase brand awareness among college students.
 Selling B2B. In Indian Corporate offices there is a Chai break and not coffee break. CSB should exploit this space and
get exclusive contracts to serve a company's staff with Chai and snacks. This will increase revenue and brand
awareness among high income people
 Chai is never had without a snack. CSB could exploit this space by selling their own biscuits, samosa, vada
pav,etc which go very well with chai. This could increase profit margins and Revenue Per User.
 Hygiene. People have become hygiene conscious more than ever, especially since Covid crisis. This could propel
people to stop going to roadside tea stalls and choose a more hygiene based place like CSB. CSB could attract this
crowd by using Standing Outdoor tables and other customers who want Chai on the go.
Threats
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 In the online space CSB faces threats from companies like Chai Point which has started delivering Chai in just 30
minutes and others companies like Chaayos which have established themselves as major players in the online space
for ready made tea space.
 In the offline space CSB considering CSB is an indoor serving place it faces threats from competitors who sell chai to
people on the go.
 Rising Competition. The space for Hygienic Chai selling is slowly getting very competitive with new players coming
in every month. Many similar companies are coming up in this untapped chai market like Chayoos, Chai point, T-
point etc. Even India's 3rd largest packaged tea maker Wagh Bakri has started to explore this space.
 Low margins on Chai. Chai’s popularity in Indian homes acts against its own image. Coffee is considered to be a
superior beverage whereas tea is considered as an ordinary beverage. Because of this, it is easy to convince a
customer to pay over RS.100 for a cup of coffee and anything more than Rs.20 will be considered expensive for
Chai.
 In the global market, Starbucks is also showing interest in this space and 9 years ago acquired Teavana, which is
now a very well known brand and has a massive digital presence and loyal customer base.

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Literature Review
2.1 Review of Literature

In the recent years, there has been a tremendous development in Chai Industry (Tea
Industry). A number of chai start-ups are hitting the grounds because of the vacuum of
any sophisticated place to have tea market there is. Tea, although is the top beverage
in India, lacked a quality place where it would be served. Hence, many aspiring
entrepreneurs are grabbing the opportunity and starting chai start-up. According to
BBC News, India consumes 837,000 tonnes of tea per annum. Despite hundreds of
elegant coffee places around, „Desi Chai‟ is irreplaceable.

Given that a majority of Indian population is between 18 – 46 years of age, the rising
per capita incomes and the inherent characteristics of these beverages being addictive
in nature, demand remains inelastic and will increase with a rise in tea and coffee
drinkers in the country. With the growing awareness of health benefits of tea, variants
of the traditional tea are growing in consumption. In India, every time is tea time.
Mornings in India are incomplete without a cup of tea. And people prefer tea over
coffee even. The Indian population consumes 30 cups of tea for every cup of coffee.
An Indian adult on average drinks at least 2 cups of chai a day. Sometimes, it
increases to 4 to 5 cups also. India is the highest tea consuming country globally and
the second-largest producer of tea in the world after China.

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A tea stall business is perfect to start venture not only in the metro cities but also in
small towns. Actually, Tier II and Tier III cities have shown similar demand as metro
cities depending on the area and population density.

Labelled as the most favourite beverage among Indians, it was lacking a proper place
in the market. With the number of establishing start-ups hitting the notch, chai was a
mandatory business to step in.

The first chai start-up of India; started by a Harvard ex-student, Chai Point is one of
the most flourishing tea cafe chains of the country. It provides a separate counter for
the smokers, outside the café, which is the major attraction. With introducing the on
delivery, the system in less than 30 minutes Chai Point makes itself stand out of the
box. Garnering the funding of $10 million recently after a previous funding of $2
million by Saama Capital, Chai Point has shown some great development and
achievements in its journey in becoming one of the best leading chai start-ups of the
country. The company also deals in chai and coffee dispensers, which is another
unique aspect.

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2.2 Conceptual Understanding

Model of working

Cafe industry in India is growing more rapidly across the country. To make their
presence felt they want to establish every part of the country as well as abroad
locations. They mainly work on three basic models:

Company owned stores

Franchise model

Mix model (company owned stores & Franchise model)

Company owned stores are fully operated by company management. All the
operations are done by company directly. All the cost is taken by company as well. In
franchise model, the person wants to start a café of any brand has to pay royalty fee to
the company. All the operation is maintained by that individual owner but all rules
and regulations of the company must be strictly follow. This is constantly check by
the company‟s quality department. Here all profit and loss has to bear by the owner.
Owner has to pay some percentage of this profit to the company. In mix model
company is going to start its café of its own as well as franchise basis. Its depend on
demand of the brand and area of the locality.

Chai Sutta Bar basically works on mix of both the models according to the
requirement. In franchise model, owner has to pay an initial amount of 15lakh to the
company which includes 60 days‟ raw materials and royalty fee. The franchise owner
has to pay 2% of its profit to the company. To make the taste similar over all the

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stores, company has made it mandatory to purchase ingredients from its store only or
the same brand products.

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Research Methodology
3.1 Problem Statement

Every cafe franchise faces problems in its initial days. Some problems persist in their expansion mode
or new problems arrive.

But the fact remains – Problems exist! No startup or business owners can claim that they have not faced
any challenges in their entrepreneurial journey.

The most profitable startup in India – Chai Sutta Bar is no different than any other company in this
matter.

Every neighborhood and city has a well-known “nukkad” tea stall. And some of them have even
progressed to serve savory foods like crunchy pakoras, spicy samosas, or a decadent bread-omelet
combo along with the tea.

The reason why friends get together every day to discuss politics, society, and the economy of the
nation is “Nukkad ki chai.”

Chai Sutta Bar is a tea cafe franchise that upgraded this nukkad ki chai Dukan concept to a standard
westernized cafe. Started in 2016, by two young entrepreneurs Anubhav Dubey and Anand Nayak, this
cafe became synonymous with the most profitable tea chain in India.

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Cafe Culture in India

Despite being present in India since the post-Colonial era, the “Café Culture” only catered to a restricted
group of people. Even then, it is mostly for coffee lovers and not tea lovers.

Till the 2000s, tea cafes were extremely rare in India. Even with the coming of multiple cafes in
metropolitan cities, they tend to be out of reach for middle-class consumers.

For any middle-class consumers, drinking tea for Rs. 15 is still a big deal. Even if the tea is of premium
quality.

Realizing the Market

Understanding the need of the market and also serving people like them, Anubhav and Anand invested
their only investment in Chai Sutta Bar. Anubhav and Anand both have come to Indore for educational
purposes just like others.

Even though Anubhav does not drink tea, he knows all his friends do. Morning tea is almost a ritual in
India.

However, no one knows the quality and hygiene factors of Chai consumed outside. This is when the
idea came to open a tea cafe franchise for India starting from Indore.

The initial idea was to serve quality tea at a very affordable rate. However, the USP was still missing. It
was then Mr. Dubey thought of using kulhad as their USP.

The traditional kulhad chai in a bar-like setting is quirky enough to attract youth. This proved right as
now the brand has become the most successful cafe franchise in India.

Challenges in the journey

1. Finance
Owners of cafes need enough money to cover daily expenses as well as their initial startup costs.
However, Chai Sutta Bar started with just Rs. 3 lakhs as an investment.

This was the entire savings of Anand Nayak’s family. As the duo did not have any other source of
investment at that point of time.

The budget in the initial days went out of control. It was the street-style jugaad that helped the duo to
manage their franchise tea shop.

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Chai Sutta Bar even today has not taken any outside investment. They have used the franchise model
as an investment and expansion method.

Keeping the franchise cost of Chai Sutta Bar manageable and profitable, the cafe franchise has got
quite brand success.

Tip: With a low budget, prioritize what you need first before following the trends or whims. Cater to the
needs of your customers which will increase the funding or your income.

2. Recruitment and Training

The main draws of a cafe are its menu and services. You require a talented chef whose recipes will
draw people to the restaurant. Additionally, you need well-trained personnel whose friendliness and
efficiency win over clients on a deeper level.

However, as a startup, we lack the funds to hire a chef or staff. In the initial days, everything from
preparing tea to serving to marketing was done by Anubhav and Anand by themselves.

It was Manoj, a local orphan, who became the first employee of Chai Sutta Bar.

Even now one of the main concerns and obstacles in owning a cafe is finding and keeping good staff.
Retaining employees is greatly aided by creating a positive workplace culture and providing benefits.

Tip: In the initial days, hire someone who understands the nature of startups. Communicate with them
about the initial problems of low salaries, irregularities, extra work, and beyond offer letter job
descriptions..

3. Administrative Bottlenecks
This is one of the biggest problems faced by many businesses in India. It’s not as easy as it may seem
to start a restaurant.

You must deal with a number of policies and other bureaucratic principles before you can open for
business.

When people started visiting Chai Sutta Bar, some of the surrounding people got curious.

One day, the Narcotics Department raided the cafe with suspicion of them selling drugs. They thought
the crowd was due to the illegal trade of drugs.

However, when they did not get even a pack of cigarettes or sutta in the cafe, they had to leave.

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Tip: Look up all the regulations in your particular state or city, or get a consultant to assist you in
navigating the bureaucracy. You can prevent future issues that restaurants may experience by taking
the effort to obtain the appropriate certifications.

4. Enigma of Sutta
This is a new problem that the cafe franchise faced in recent times. While opening its new outlet, the
brand faced an administrative issue with the word Sutta and Bar in Dubai.

The Gulf country has strict protocols regarding alcohol and tobacco consumption. Even though Chai
Sutta Bar does not serve any of the products, it still faced issues.

Many times, even customers get confused about whether the franchise tea shop sells cigarettes or not.
To be frank, smoking and consuming alcohol is strictly prohibited in the premises of the cafe.

Tip: Truthfully speaking, here we don’t know much about what tip to be given. Choosing a brand name
is an important process. The more unique your brand name is the more you can attract your customers.
And sometimes, some unfortunate setbacks!

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5. Kulhad is boon and bane both
Don’t get us wrong as we have mentioned that Chai Sutta Bar is synonymous with kulhad chai. From the
initial days, the USP of the cafe franchise is tea served in kulhads.

However, kulhads are made up of burnt clay and they break quite easily. Everyday in Chai Sutta Bar,
more than 4.5 lakh kulhads are used.

The kulhads are customized and throughout the country as well as outside the cafe serve its beverages
in the same design. This means that a stock of kulhads is regularly despatched from Indore to other
areas in the country.

Read Also, The Kulhad Man of India

Many kulhads get damaged even before their use. Also, kulhads can be used once only. This means a
separate budget is designed for their procurement only.

This is one of the challenges that the cafe franchise has continuously faced since its inception.

Tip: Even Though kulhads create problems, it is a much better alternative to plastic. Chai Sutta Bar has
always worked for sustainable solutions and kulhad is the answer to it.

Teaching staff to handle them with care is one tip that we have been following. Also making everyone
understand the efforts a potter gives to make one single kulhad helped us in a long way.

In Conclusion
There will undoubtedly be times in our lives when we must overcome problems, but the real issue is how
we develop and learn from doing so. Any franchise business will have problems and the real deal is to
accept the challenge and overcome them.

Chai Sutta Bar has also faced these challenges and many others as well. We have always believed in
moving forward and learning from everything. Each problem that we faced taught us how to survive and
succeed.

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3.2 Objectives of the study

Research Objective

The main objective is to open an outlet in the campus of IIM Indore.This

would require following sub objectives:

 To How company works and what kind of model they follow

 To Understand the difference between campus outlet and normal outlet stores.

 To Understand Rule & Regulations of IIM Indore to open a new outlet.

 To Understand major problems that students faced with other outlets which are

already present in the campus.

 To Construct a plan to solve problems face by the students.

 To Construct a blue print of cost estimation and revenue generation from the

outlet.



 

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3.3 Hypothesis

Rationale of Research

The purpose of the project is to draw a standardized campus outlet plan for IIM
Indore. This standard plan may be useful for future campus plans which company has.
Company has been in this business since 2016 and know very well about this industry.
For café industry youths are the main target customer. To make they aware about the
company campus outlets are the major weapons. As the company has its Head branch
in Indore so it‟s easier for them to in local college campus. That‟s why I choose IIM
Indore. In this campus, already 2-3 other company outlets are there. So to make it
success and demandable for campus students, it is required to plan a correct estimation
of cost and revenue. Forecasting is another part which has to be done correctly. A
good forecasting system not only results in improved customer satisfaction but it also
helps an organization in reducing the cost thereby increasing the profit of the
company.

Research Questions

Basically questions are regarding rules inside the campus which has to be obey. There
are some questions regarding procedures of opening the campus outlet and about the
problems students face in their day to day activity. These questions are FAQs. We put
it in appendix 1.

Refer appendix 1 for questionnaire.

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Process of Opening outlet in IIM Indore:

(Fig. 4)

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3.4 Research Design
Sample

A sample is a finite part of a statistical population whose properties are studied to gain information about the
whole. When dealing with people, a sample can be defined as a set of respondents (people) selected from a larger
population for the purpose of a survey.

Sampling is concerned with the selection of a subset of individuals from within a statistical population to estimate
characteristics of the whole population. Sampling is an important part of any research because the research
findings depend upon the selected sample. There are various ways in which sampling can be done. In this research
the sampling method used was purposive sampling. This method of sampling is also known as judgment, selective
or subjective sampling. In this type of sampling the researcher uses his/her judgment to select cases that will bebest
able to answer the research question(s) and to meet the objectives. Purposive sampling is often used when working
with very small samples (such as - in case study research) and when you wish to select cases that are particularly
informative.

Procedure

• Secondary research

The main objective of this research was to collect data from the college regarding the procedure of opening an
outlet and information regarding student‟s strength and their problems. Secondary research refers to the use of
secondary data. Secondary data is the data is collected by someone other than the user. Analysing and interpreting
already existing data is known as secondary research. It involves the collation and/or synthesis of already existing
research.

• Estimation

After collecting data, we prepared a blue print of how to open new outlet. From the data collected from secondary
research it was bit helpful to estimate a cost sheet which include initial investment, fixed cost & operating cost.
Considering no. of students present within campus we estimated a revenue sheet which shows the company‟s
income from this outlet. Here we considered maximum cost and minimum revenue concept to make the plan more
realistic and viable.

• Data Analysis

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From the estimation of cost and revenue, we calculated the breakeven for this outlet. Also recommend some new
techniques for more efficient operation.

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3.5 Data collection and analysis tool

Presentations of Data

Restaurant Industry contributes 3% to the GDP of India. As per NRAI – Food

Services Report, 2019:

a. Market Outlook:

The Food Services sector grew at 11% CAGR in the period 2015-16 to 2018-19. The
sector was worth Rs. 4,23,865 cr. In 2018-19 and is projected to grow at a CAGR of
9% by 2022- 23 with projected worth of Rs. 5,99,784 cr. annual revenue.

b. Consumer Outlook:

With the highest millennial population, India has a high spending capacity. They have
contributed to the increase in customers of the Restaurant industry with an increased
frequency of 6.6 times a month and Rs 2,500 as a monthly expenditure.

c. Employment Outlook:

The industry contributes directly to the employment in the country, which stood at 7.3
million in 2018-19. The projections for 2022-23 is 6% CAGR with 9.2 million
employments.

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Graph 1: Market Size of Restaurant Industry (in Rs. Crore)

Source: Based on the data from NRAI – Food Services Report, 2019

Figure 1: Actual and Projected Data of Restaurant Industry

Source: Based on the data from NRAI – Food Services Report, 2019

But the Industry Outlook looks blurry, as the Covid-19 crisis arises across the world, affecting
every industry and economic projections. In India, Lockdown from March 25, 2020 to present,
has affected the restaurant industry to a great extent. Restaurants are operating only on the
delivery models, which are limited and non-profitable to the businesses, for big restaurants.
However medium and small restaurant businesses have adopted the model in less numbers, as
they still look for an end to lockdown days.

Restaurants work on EBITDA margins of 15-30% depending on the size and category it is into
but, they all have low cash flows of generally 2-3 weeks.

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Data Analysis & Interpretation

Estimation

we consider current college campus strength which include students, faculty members and other staffs.

PARTICULAR NUMBER

STUDENT 1300

STAFFS INCLUDING FACULTIES 100

TOTAL 1404

(Table- 1)

Note- This data was taken as mentioned on the college website. Actual population may more
than this. It was considered as minimum basis.

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Initial Investment: This cost is for infrastructure installation which is estimated
around 9 lakhs as it is company driven franchise but when it costs 15 lakhs when the
franchise is opened by other individual.

No. Investment Value Total requirement Cost

1 Furniture 300000 300000

2 Air conditioner 40000 1 40000

3 Machines 300000 300000

(Tea machine, coffee

machine,microwave,etc)

4 computer 30000 1 30000

5 Refrigerator 15000 2 30000

6 other expenses 200000 200000

(utensils, Aqua guard, cooking instruments,light,fan etc)

Total 900000

(Table-2)

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Ordering Cost:

Raw Materials for Weekly Functioning

QUANTITY
DAILY REQUIREMENT(WEEKLY
INGRIDIENTS QTY APPROX) PRICE COMMENTS

Milk 37 LTR 300 LTR 300* Rs (500+ 100+10+5 ) 15000

50=8250 CUPS DAILY *7
DAYS * 60 ML MILK
PER CUP APPROX
=258300ml WEEKLY
= 258 ltr

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((includes tea coffe

and cold coffe
expected sales ))
500 CUPS DAILY *7
DAYS * 6 GRAMS
13 * Rs PER CUP APPROX
300 21000 GRM
Tea Leaves 3 KG ~21 KG =6300 WEEKLY 6300
(100 + 05 )CUPS
DAILY * 7 DAYS *6
4.5 * Rs GRMS
400 APPROX 4410 GRMS
Coffee Powder 0.65 KG ~4.5 KG =1800 WEEKLY 1800
500 TEA+ 100
H.COFFEE + 50
650 * Rs BUFFER FOR
Kulhad 92 PCS 650 PCS 2 =1300 DAMAGE 1300
300 2 * Rs Only being served with
Ketchup GRMS 2 KG 160 =320 the fries . 320
currently maggie , fries
150 1 * Rs 20 , poha only being
Salt GRMS 1 KG = 20 cooked. 20
~700 CUPS DAILY *
7 DAYS * 5 GRMS
PER TSP APPROX
25 * Rs 24500 GRMS
Sugar 3.5 KG 25KG 42 =1050 WEEKLY 1050
50 SANDWICH
DAILY * 2 PCS
NEEDED TO
PREPARE A PCS =
100 PCS REQUIRED
23 USABLE PCS IN A
PACKET
Bread 4 28 PACKET 28 * RS APPROX 5 PACKET 840
PACKET 30 = 840 NEEDED

30 WEEKLY DAILY *
210 * Rs 7 DAYS =210 PCS
Eggs 30 PCS 210 PCS 5 = 1050 EGG 1050
525 * rs 75 PACKET DAILY *
Maggie Packet 75 PCS 525 PCS 11 = 3850 7 DAYS = 525 PACKS 5775

1kg = 7 PLATES
49 * Rs approx
Raw Poha 7 kg 49kg 40 = if ~50 Plates sold 1960
1960 Daily so 7kg daily

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requirement * 7 days =
49 KG weekly
1kg = 10 plates of fries
if 20 Plates sold Daily
18 * Rs * 7 days = 140 plates
150 = weekly = 14 KG
Frozen fries 2 kg 14kg 2100 weekly 2100

2* Rs 50
GINGER 300 grms 2 KG = 100 Needed for tea 100
1 * Rs
1600 =
ELAICHI 150 grms 1KG 1600 Needed for tea 1600
for bun maska, 50
plates daily * 7 Days =
350 Plates
23* Rs 1 Kg butter can be
120 = used for 15 buns ,
Butter 3.1 kg 23 KG 2760
2760 Hence 350/15= ~23 kg

Need 50 buns daily ,

63 pack * 350 weekly , 1 packet
Rs 36 has = 6 buns, 50/6 = 9
Bread Bun 9 packets 63 packet (350 PCS ) =2268 packets daily 2268

140 * Rs Rs 25 per burger buns

Burger bread 20 PCS 140 PCS 25 =3500 20 PCS daily * 7 days 3500
= 140 PCS Weekly
20 PCS daily * 7 days
= 140 PCS Weekly
2 * Rs 1 Packet = 32 PCS , so
Burger Cutlet 1 pack 70 PCS = 2 pack 240 = 480 2 packet for a Week 960

Misllaneous Rs 2000 2000

Total 50703
(Table 3)
Note: This cost sheet is based on the menu which company provide on their campus
outlet and strength of the population. Some item cost may vary from place to place.

The data mentioned on the table are the weekly ordering cost which is approx.

Rs 50100. Monthly ordering cost around Rs 255000.

Operating Cost

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Rs./ month Comment

In IIM I vendor report rent is 40 Rs/ sq. Feet, we

Rent 10000 assume 250 sq.
Feet, Light bill included
4 employee, 2 employee salary= 10000, 2 employee
Employee salary 36000 salary=
8000
Insurance, electricity
bills 6000 Safety equipment, cleaning and others

Total 52000
(Table 4)

Note: Data is estimated on monthly basis.

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Revenue Estimation:

Food Items Expected daily Sales Price Per Item Revenue

in Rs
Tea 500 10 5000
Hot Coffee 100 15 1500
Cold Coffee 5 60 300
Maggi 75 35 2625
Sandwich 50 35 1750
Bun Maska 50 20 1000
Milk Shake 10 60 600
Poha 50 20 1000
Fries 20 50 1000
Burger 20 45 900
15675 Per day
Total Revenue 109725 Per week
(Table 5)

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5.1 Finding

consumption of tea we considered 250 people out of 1404 population because we

worked on minimum revenue concept. Normally a person takes tea twice in a day.
That‟s why we took 250*2=500 cups of tea.

Poha and Bun maska were considered breakfast items as student prefer them. Other
existing outlet didn‟t provide breakfast so these items has more order volume.

Sandwich and Maggie were most popular food item among students because it had
less cost and took less time to prepare.

Fries and Burger were taken less quantity as they were oily. People consume them
occasionally.

Here all the items present on menu wasn‟t considered. We took items which were
more popular among students.

We consider 25days of working in a month.

Then total revenue generation 15675*25= 391875 per month

Calculation

total cost= ordering cost + operating cost

= 52000 + 255000 = 307000 per month

Total revenue= 391875 per month = 392000 approx.

Pay Back period:

Profit = total revenue – total cost

= 392000 – 307000 = 85000 per month

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Payback Period = 900000/85000 = 10.58 month

This time period was an approximate number. Actual period was 2-3
months more because campus was empty during summer vacation so
revenue generation may nothappen those months.

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5.2 Recommendation/ Suggestions

Implementation Strategy for CSB

1. Safety measures

Restarting the business during this time can be very risky. The most important would be
the online Food Delivery. And the rest safety measures should be followed to provide
customers a hygienic and safe environment in this Covid-19 pandemic.

a. Online Food Delivery

Contactless pickup and drop off
Delivery guy should maintain personal safety by wearing masks and gloves.
Ask for options, if cutlery is needed or not as that can be a source of
transmission. Provide incentives for online payments.

b. Counter

A protective glass pane can be setup. If not, then minimum distance from
where customers can order food should be maintained.
GPay, PhonePe, PayTM and other Upi based payment method links should
be put up.
Hand sanitizers to be made available for customers.

c. Sitting Arrangement
The number of tables should be halved ensuring proper spacing between
them. The tables should be cleaned after each and every serving.

d. Food Safety
Use of use and throw plates.
Use appliances safely so that you do not need to call a technician or
replace it during this pandemic.
Rinsing and cleaning all the vegetables twice. Use of lukewarm water is
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Separate raw meat and fish from other food items and try to use different
cutting boards.
e. Safety of staff
Temperature check of every staff before starting their
shifts. Washing hands after every order.
Limit food handling (Both during customer orders and while obtaining
supplies).
Contactless drop off method should be practiced.
Use of masks and gloves which should be washed and sanitized after use.

f. Rotation of employees

Instead of calling whole staff together there should be a rotation cycle of

calling employees.
The whole staff should be divided into 2 teams and they can come
in their respective shifts.
This will maintain social distancing as well.

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1. Technique used to take orders and deliver them with minimum contact

Chai Sutta Bar can open its operations for take home or home deliveries with following
considerations:

a. Taking Orders:

Orders can be taken through following modes:

i. Telephone orders
ii. Website order
iii. WhatsApp orders
iv. QR Code scanning for online order forms
v. Order on Chai Sutta Bar App

The three-shift restaurant menus:

Besides full meal time menus, many restaurants will offer in-
between meals menus, snack menus, all-day menus and maybe even
late-night menus, in order to capture the online big market.

Change in menu with offerings which can stay fresh till its delivered.

Payment terms should be in installments according to the stage of

dining, for example: order-preparation-out for delivery-delivered
through online payment.

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b. Preparation of Orders:

The kitchen in full public view:

In order to build trust among customers, trust and safety

videos of CSB staff can be shared on social platforms such
as Instagram, Facebook, etc.

20 seconds hand wash protocol:

It should be promoted as a regular practice at CSB outlets

in order to ensure safety of kitchen staff and other related
parties.

Masks should be made compulsory.

Temperature screening should be done regularly by the employees.

CSB can also promote its supply chain partners in order to

promote safety from the initial stage.

c. Delivery:

Small green card:

Home delivery meals can be sent with a small green card which
contains following details:
i. Temperature readings of cook and delivery person
ii. Timing when the delivered packet was last sanitized
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No sharing, single portions please:

It is not only about contact less delivery but also about

minimal contact between those at the same table. Hence,
quantities of offerings can be checked in menus.