Why is running cafe a hard business?
Except Cafe Coffee Day (CCD) and one local cafe chain, no Indian cafe chain is profitable. High costs, poor infrastructure, and difficult to get capital makes restaurants hard to run. In fact, CCD could never generate big profit margins. It had debt worth more than INR 6000 crores.
Eight years old Starbucks India, with 146 stores, made a loss of INR 30 crores . Nine years old Chai Point, with more than 150 outlets, made a loss of INR 38.5 crores. Seven year old Chayoos, with 70 outlets, made a loss of INR 16.3 crores. Fourteen years old Costa Coffee India, with its 46 outlets ( down from 100 outlets), made a loss of INR 48 crores. Nineteen years old Barista Coffee, with its 220 stores, is struggling to make profit.
Is there an operating model, which makes profits? Delhi-NCR based Bizibean has mastered one such operating model.They avoid opening cafes in expensive locations. They also run shopfront kiosks, other than selling coffee beans, teas and snacks.