Entrepreneurship Case Study

BurgerMan’s Low-Cost Franchisee Model: Kiosks Lead the Way

OR

Abstract:
Recognising the advantages of low-cost business models implemented in industries like aviation and retail, players across various industrial segments have adopted this model and become successful. Entrepreneurs in India as well embraced this model and are operating successfully. One such business is BurgerMan Foods India Pvt. Ltd. (BurgerMan), a fast food chain, operating on a low-cost franchisee model. Started on December 21, 2006, in Chennai, the chain has expanded to Bangalore and Hyderabad with 105 outlets by May 2010. Unlike other fast food joints, this chain operates through franchised kiosks, set up in a 25 sq. ft., area in the premises of high consumer footfall places like supermarkets, shopping malls, etc. Sunil Cherian (Cherian), founder and CEO of BurgerMan, ensures that the products served in the kiosks have the standard taste, quality and affordable price. Besides, care is also taken that the franchisees follow the Standard Operating Procedures (SOPs) to attract customers and enhance the brand image of the fast food chain. While the franchisee only takes care of maintaining the kiosk, the company efficiently manages the entire back-end supply chain (sourcing and distributing).

However, as Cherian plans to go pan-India, with a vision of 5,000 outlets in the next 5 years, challenges are bound to come along its way. The biggest one would be to build a distinct brand image around unique customer experience, distinct product and brand attributes.

Pedagogical Objectives:

• To understand the roots and efficacy of BurgerMan's business model
• To understand the execution challenges of BurgerMan's business and analyze how these challenges were dealt with by the company, in the light of fast food industry's critical success factors
• To examine the economics of running a BurgerMan's kiosk and to discuss the role of franchisees' in BurgerMan's growth
• To debate on the scaling-up challenges for BurgerMan.

Keywords : Business Model; Business Plan vs. Business Model; Entrepreneurship; India Entrepreneurs; BurgerMan; BurgerMan Kiosks; Sunil Cherian; Low-cost Fast Food Franchisee; Franchisee Model; Indian Fast Food Industry; Fast Food Restaurants in India; Vision; Mission; Supply Chain Management; Social Entrepreneurs; Fast Food Operations