Chaiiwalla to roll out in London
Chaiiwalla currently has 45 stores, with the latest opening this week in Fosse Shopping Park, Leicester.
A debut international store also opened in Vancouver, Canada, on Monday (15 November), where the master franchise partner plans to open more sites by the first quarter of next year.
The openings follow launches in Bethnal Green last week. Aylesbury follows next week, along with units in Wood Green, north London; Stoke-on-Trent; and Southampton.
The group, which has six company-run stores in Leicester, is bringing the format to central London next month where it will open a company-run stores in Brompton Road, Knightsbridge on 13 December.
Another will follow towards the Marble Arch End of Edgware Road with plans to look for sites in Mayfair, Soho and Kensington.
Nil Naik, franchise director, told MCA, BigHospitality's sister site: “We will open in central London, give it six months of blood, sweat and tears so that we can give a playbook to franchisees as a test to see what it takes to operate them successfully.”
Naik, a former head of UK and international franchise sales at Coffee Republic, said Chaiiwalla had 12 'growth partners' that would open stores 'from Glasgow down to Southampton'.
Naik said stores in Dundee, Edinburgh and three more in Glasgow would open early in 2022.
He said he planned to focus on Europe and new markets overseas next year, including Germany, Belgium, Switzerland, France, Spain, Portugal and Denmark. Dubai would open 'around March'.
Naik said: “We are introducing South Indian street food to the masses. The pull is chai and that is what we are known for. We do a karak coffee as well – which means strong, but sweet.”
Many of the franchise partners were serial franchisees with other brands, such as Domino’s, German Donner Kebab, Starbucks and Costa Coffee, he said.
“They understand what good franchise looks like, they understand the benefits of working with a franchise and they also understand what the relationship holds and how that works. We give them the playbook, full training for them and their team.”
Naik said each non-central London store cost typically £200,000-£250,000 including furniture, signage, refrigeration and other equipment, which was what the franchisees invested on top of a 'nominal' franchise fee for each store.
“We give them an area development agreement and don’t give them more than 24 months to develop their plan. We’ve got one franchisee who will open 10 stores with us next year in the Birmingham area.”
Niak said the first stores Chaiiwalla opened were typically 800 sq ft with typical sales of about £10,000 a week.
“We’ve not got stores in London averaging £28,000 a week and margins between 20% and 22% net.
“Our target demographic is everyone who has had a peak behind the curtain of what South Asian street food tastes like, who have had variations of chai elsewhere and what to see what a real chai tastes like. It used to be an Asian demographic but it’s not that anymore."
