Banking on the success of Behrouz Biryani, they then launched a pizza brand called Oven Story Pizza. 18 months into launch, Behrouz had skyrocketed to become a $12 million business. The first brand that was launched after Faasos was Behrouz Biryani, which soon went national, and they were delivering more than 2 lakh biryanis a month, within a year. Investors across the globe have paid attention to this development and have believed in our long-term goal,” he said.įurther, the founders also realized that they could build multiple brands from the same kitchen. A combination of this model with lower break-evens and change in the consumer environment enabled us to scale up quickly and build brands. “We altered the store economics of a restaurant by reducing capital investments, taking away prime real estate costs and expensive service staff. And more importantly, they no longer had to worry about finding great locations & location fatigue - two problems that had previously hampered the scale-up operation. The rent-to-sales ratio dropped from 15 per cent to 4 per cent in the next two years. The shift changed the entire economics of the business. Thus, the biggest turning point for the startup came when the founders found out that their web and phone delivery business was growing independently of the stores and thus decided to shut down the quick service outlets (QSRs) and lease low-rent spaces for kitchens instead, to transition from being a QSR to a kitchen with only online delivery. “It worked beautifully as our revenue kept climbing while our rent nosedived, generating a kitchen level profit within a couple of months,” said Grover. That’s when the founders and the team decided to pilot a kitchen on the second floor of an industrial estate with 80 per cent lower rent than a high street location in the same area, more space, and a better working atmosphere for employees. We then thought, “why exactly do we need to be on the high-street?,” said Ankush Grover, co-founder, Rebel Foods, who joined Rebel Foods in 2012 as part of Faasos Entrepreneur in Residence program with his learnings from previous stints. So, we asked our customers a simple question through a text survey: “Have you ever seen or been to a Faasos outlet?” A whopping 74 per cent responded “no”.
“We realized that even with 50 high street locations, around 75 per cent of Faasos orders were for delivery. Location and hence rent was the biggest friction in their business. Around this time, co-founders Jaydeep Barman and Kallol Banerjee attended a Sequoia Capital (its longest backers) conference where Doug Leone said something along the lines of, “the most important job of leaders is to find the stickiest friction for growth and remove it”.
Hurting most were the exorbitant rentals on the high street. The top-line growth, though, was eclipsed by a bleeding bottom line. Revenues jumped from INR 4 crore in fiscal 2012 to INR 62 crore in four years and the brand expanded to three cities and opened 40 outlets. In five years, Faasos made steady progress.
In 2003, Rebel Foods started a single shop of rolls called Faasos in Pune with this vision. Since then it has been on a roller coaster ride and today the foodtech unicorn has today built more than 45 brands across 10 countries including India, Indonesia, United Arab Emirates, United Kingdom, Singapore, Malaysia, Thailand, Hong Kong, Philippines, and Bangladesh. Rebel Foods did not start as a cloud kitchen company but started with an aim to become a dominant player in the organized retail chain in 2003.
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