He borrowed money from his father to start the company at an investment of Rs 2 lakh, and on a leased space of 200 sqft, on August 23, 2001, at Malad railway station in Mumbai. “My decision to set up a vada pav shop was met with scepticism by some. After all, street vendors were the only ones selling vada pav, and many people felt it was an unusual choice for someone from a respectable family with a good education to venture into this business. Despite the initial doubts, however, I remained committed to my vision and focused on providing high-quality, hygienic vada pav to the busy commuters of Mumbai,” says Gupta.
The road for Gupta was, however, not an easy one. “When you start out, everything can be a challenge or an opportunity. I remember I wanted to develop a dispenser in which the burger remains warm. Burger chains I had visited internationally used them as a standard feature, but their machines were too expensive. I knew that in India, I could create the same machine at a better price. I reached out to prospective vendors saying I would need a hundred such machines. This helped me find a vendor who shared my vision and was willing to work with me to create the machines I needed,” he says.
Gupta’s belief was based on the stats that vada pav was the most popular snack in Mumbai, with over 20 lakh units sold each day, yet it was completely unbranded. People were willing to spend hundreds of rupees on a burger, but many felt that Rs 20 was too much to spend on a vada pav. “However, I believed that there was a market for a branded, hygienic version of this popular snack. I was convinced that if even 10% of those 20 lakh users cared about hygiene, we could create a powerful brand that would resonate with them,” says Gupta.
New menu
Since its launch, the brand has continued to thrive, but it wasn’t until 2017 that Gupta made a significant shift in its business model. The company shifted from serving vada pavs to burgers and looked at more aggressive pan-India growth. “That’s when we started offering ‘Burgers-On-The-Go,’ which marked a major evolution for our brand. Thanks to the positive reception and strong recall value of our new product line, I believe Jumboking was effectively born in 2017,” says Gupta.
Jumboking today claims to be India’s third-largest burger company, after McDonald’s and Burger King, with over 165 million burgers sold to date. “We sell various flavors of burgers — such as corn palak jumboking, nachos jumboking, spicy mexican, etc,” says Gupta.
The entrepreneur says with young working professionals and college students short on time, they need a fulfilling snack that is tasty and can be consumed on the go. Jumboking fits the bill beautifully.
What has remained constant for Gupta has been the way to operate and expand very early in his business. He took the franchise route. “I was fortunate enough to read many books about the expansion of restaurants via franchising. One is able to build strong, symbiotic partnerships with individual entrepreneurs who can benefit from a well-oiled system. At the time, my vision was to create a very inclusive and resilient growth engine. When I look at the challenges that the restaurant industry faced during Covid, I am tremendously happy that franchising is one reason that we stayed resilient as a company,” says Gupta.
Dheeraj Gupta, founder, Jumboking
Jumboking appointed its first franchisee in 2004 and Gupta adds it was someone who had operated a franchise abroad and understood how it worked.
Gupta, however, did not go all out on franchising initially. In 2010, when the company had a presence in 13 cities with 52 stores, half of this was company-owned. “We realised that our company-owned stores required a different management bandwidth. We rebuilt into a franchising company and built strong supply chain partnerships, brand campaigns and integrated technology and accountability at every logistical checkpoint. Training is one of our biggest strengths today and our current store count is 150 in Mumbai, Delhi and Hyderabad,” says Gupta. The company plans to expand to 1,000 stores by 2030.
When Mumbai-based Karthik Naidu and his wife wanted to take a franchisee of a food brand, they spent six months doing a recce of everything from McDonald’s to KFC, Subway to Naturals, before zeroing in on Jumboking. “I stumbled upon Jumboking while I was at my CA’s office and I happened to meet an existing franchisee of JK. By then I was aware of the basics of any franchisee brand and after getting satisfactory answers to each of my questions, I sent my inquiry to take up the franchise of JK. The support extended by the company from identifying the right property to setting up the store, the clear definitions of every element of store operations, along with the technical support, helped me make an informed decision. We finally started our first JK store in July 2016,” says Naidu.
As a franchisee, all Naidu needed to focus was on customer interaction and customer service. “When I compare the effort taken to run this store against a self-run restaurant, I think 80% of the hard work is already done by the franchisor. The remaining 20% that I need to take care of, is also completely aligned and the requisite timely training is imparted to me,” says Naidu.
His store is at a metro station and doing about Rs 90 lakh in revenue per annum. “That’s a good number for a store that is just 150 sqft. With the steady growth seen over the years, we are contemplating adding 2 or maybe 3 more stores to the kitty. We are expecting a monthly run rate of Rs 40 lakh totalling about Rs 5 crore revenue yearly,” says Naidu.
Franchisees invest Rs 15-20 lakh on a store, with a payback period of 1.5 to 5 years. The franchisees pay 8% royalty fee from sales, which will increase to 10% next year as the company plans to increase its advertising spend for the brand.
Stronger, better
Competition is tough, especially in the QSR space. But Gupta is not perturbed. “Competition is always going to be tough, but what a business owner can do is not become his own competition by being unfocused. Specialist businesses have always done well. Your customer must have an image of you in their mind and you have to be true to that,” says Gupta.
The entrepreneur adds that the other key to tackling competition is innovation. “I read about an IBM-Oxford study, titled Entrepreneurial India. It said that 77% of the venture capitalists believe they do not have unique business models. Lack of innovation is the main reason for business failures. Another factor to focus on is training. We have a culture of training in the organisation and I have seen that this is a compelling competitive advantage,” says Gupta.
Despite the challenges posed by the pandemic, Jumboking says it has emerged stronger than before. The company says it has seen 218% growth during April-March 2023 against the year-ago period.
