Daybreak - Casual dining doesn't scale like fast food. Bharti is betting on Olive Garden anyway

Episode Date: August 9, 2026

On a hot Thursday evening in Delhi, people are queuing outside India's first Olive Garden. Some found it on Instagram. Others wandered over from the business park next door. Almost all have waited at least half an hour.Bharti Group wants 10 Olive Gardens in three years, and 125 total restaurants — more than double what it runs today. Indians are dining out more than ever, and serious money is following.But the most successful restaurants in India have deliberately stayed small. The ones that tried to scale mostly didn't. And Bharti's confidence rests entirely on a simple observation: that Indians are dining out more than they ever were.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

It's a hot Thursday evening in Delhi and people are cute outside India's first Olive Garden outlet. Some have come after having looked longingly at Instagram reels about the American casual dining restaurant chain. Others are office goers from the business park in Arrow City. And almost all of them have spent at least half an hour waiting for a seat. All of this looks like good news for Bharti Group, which brought Olive Garden to India in May and probably hope to see the same crowd. Now, Bharti Group's dining arm called Gourmet Investments is run by Ramith Mithal. He is a nephew of billionaire Sunil Bharti Mital, the man who runs Bharti Group and who founded

the telecom giant Airtel. Already, Gourmet Investments operates around 55 restaurants across India today. All brands you probably recognize, like Pizza Express, P.F. Changs and Chili's. The business has even grown its sales by over 40% to almost 180 crore rupees in the five years to FI-25. And over the next three years, Bharti wants to go even bigger. The plan is to more than double its current footprint to 125 outlets, including 10 Olive Gardens. That's as ambitious a target as it sounds. And to lead that push, Gourmet Investments has hired Rohan Pivaker, the former

chief of Pizza Hut as the Vertical's new CEO. Even the timing looks right for this plan. All the cuisines that once felt niche like Italian, Chinese, Mexican, Japanese Thai have found fans in urban India. Diners are more well-traveled now and more willing to pay a premium for a proper sit-down experience. But there's a catch. You see, Bharti is betting big on casual dining. a segment that has proved to be hard to scale. Unlike fast food chains that run on fixed menus and standardized operations,

casual dining depends on bigger kitchens, longer service times, and staff that is equally trained in cooking as well as hosting. Getting all of that right at every single location is not easy. Take Chili's, the American Tex-Mex chain, for instance, which learned the lesson the hard way. It landed in India in 2009 with a plan to open at least 50 outlets in South and West India alone. 15 years later, it has only 30 restaurants nationwide. That's the kind of challenge that Bharty is up against.

The conglomerate wants to build a chain business in a segment where success usually tops out at about 20-something outlets. And its confidence lays on a very simple observation. that Indians have changed the way they dine out. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Richard Virgis, and every day of the week, my co-host Nikita Sharma and I will bring you one new story that is worth understanding and worth your time.

Today is Monday, the 10th of August. Pandemic was the turning point. You see, before 2020, visiting a fast food chain used to feel like an event. Today, though, fast food convenience has moved online. So, when people do step out, they increasingly upgrade to casual dining instead. That's what Khranal Chawala, who once ran Pizza Express India, told my colleague the Ken reporter Akriti Bhala. He has also spent more than 12 years scaling fast food chains like Pizza Hut and KFC.

A report from NRAI, the body that represents the Indian food service and restaurant industry, adds another layer to his observation. It's said that the typical casualty-y-y-y-y-y-y-y-y-y-y-yredsendor-industry. It said that the typical casual dining customer is 20 to 40 years old. The report even has a name for this demographic. Taste Voyagers. They are the kind of people who are always looking for new cuisines and experiences. Which explains why some serious capital is now pouring into the space.

You see, before COVID, most of the investment in independent restaurants came from homegrown hospitality groups like K.A. Hospitality and specialty restaurants. But five experts from the food and beverage industry told Akriti that post-COVID companies are accelerating the push-to-scale casual dining businesses to make the most of the trend. And Bharti was one of the first companies to see the opportunity. Through Gourmet investments, it has spent nearly 15 years building a portfolio of foreign restaurant brands.

Olive Garden is just the latest. Other companies have followed Bharty's soon. The Birlas, for example, launched several places under its Aditya Birla new age hospitality arm. The list includes places like Hakasin, a Cantonese cuisine restaurant, Yaucha, a place known for its dimsums, and Nara Thai, another Southeast Asian cuisine spot. There's also K-hospitality, one of India's largest privately held food service companies that operates chains like Wagamama and Nandoes. Even the Ambani's have partnered with Prettamonje, a breakfast cafe and Armani Cafe, an Italian luxury dining major. Considering all the investments, it makes sense that India now has over 1,000,000 casual dining restaurants, which, according to NRAI, is nearly half the organized dining market. But despite the support of some of the most influential corporates, most international brands have found limited success in India.

Take Yaucha, for example. In 2013, KIA Hospitality, its former owner, tried expanding beyond Mumbai into an upscale locality in southwest Delhi. But the monthly sales swung from 1.6 crore rupees to just 60 lakh rupees before it eventually shut down in 2017. An industry veteran who worked with the brand told Akriti that Delhi's palate just was not ready for it. But that hasn't really affected the optimism in the space. Other brands are more confident that current consumption trends can help them scale. Indians travel more now, are more familiar with foreign cuisines, and they're more willing to spend on dining out than they were a decade ago.

Abhishek bin Dil, the former CEO of Birlah's hospitality arm and currently the founder of a hospitality consultancy, believes that a premium casual dining brand can realistically scale to around 10 outlets in the Indian market. Though, he also said that with average spends of $3,000 for two customers at each restaurant, while expansion opportunities do exist, they are not limitless. Those same 10 outlets become a natural ceiling for casual dining concepts. Because after those outlets are set up, other factors such as market depth, operational complexity and brand positioning begin to constrain further expansion.

Bharti has actually known this from before. In 2019, gourmet investments operated about 15 restaurants and planned to add 80 more by 2020. Seven years later, even though its overall footprint has grown in size, it is still quite short of that original target. More on this in the next segment. If you walk down Bangalore's 12th main road in Indranagar, you will see that the 1.5 kilometre stretch is packed with restaurants. You'll find both homegrown and international brands offering every cuisine imaginable from Italian to Thai and Japanese. They also cater to an affluent crowd that is largely made up of VCs and tech entrepreneurs.

Even Bharti has a presence here in the shape of a Pizza Express outlet. But despite its prime location, the restaurant is described as emptier than its peers by a 24-year-old who is a regular on the street. The diner told Akriti that the busier Italian spots there are Pizza Four Piece, which is a Vietnamese chain that has a Japanese-Italian fusion cuisine and the Pizza Bakery, a homegrown brand. She said that Pizza Four-Piece is usually booked out a week in advance and is often full at odd hours. Even the pizza bakery is usually full, but tables usually free up after some waiting. Now, Pizza Express has faced its own set of challenges in India. It first entered the country in the late 2000s with a different partner. Then it exited soon and returned with Gomei investments in 2012.

Both its investors and rivals report that since then, Pizza Express has actually shut down several outlets in Delhi and Bangal because of increasing costs. competition. An investor from a VC firm also told Akriti that another reason why Pizza Express has struggled is that pizza as a category has become commoditized and rivals have simply outdone the chain in terms of novelty and quality. Meanwhile, some of the most successful restaurants in India have deliberately stayed small. Take the pizza bakery in Bangal, for example, or the table and Bombay canteen in Mumbai, or even Leo's Pizzeria and the Big Chill in Delhi.

All of them are nearly a decade old, but none are exactly in a rush to expand. Why? Well, because casual dining is driven by innovative chef-led menus that are hard to replicate at scale. That's what Samir said, the CEO of Hunger Inc. hospitality told Akrity. The company, by the way, owns popular brands, like Bombay Canteen and Veronica's. He also explained that mostly certain concepts like cafes, sandwiches, pizzas can be scaled

but only with rigorous standard operating procedures in place. Having said that though, half of Hunger Inc.'s revenue now doesn't really come from its restaurants, but from Bombay Sweet Shop, a premium sweet retailer which started in early 2020 and has scaled through dark stores. The brand has actually helped the company raise over 200 crore rupees from investors like Lighthouse and BSG consumer partners. Gori Devi Diyyal, the co-founder of the table, makes the case for keeping it small quite simply.

Customers return to a spot as much for the relationship with the staff as they do for the food. She said that intimacy is the product. It can't be copied, packed or shipped out. Several industry stakeholders, including ex-employees from Birla and Bharti groups, said that for global brands, so India is just another consumption market. And it's a big enough market to satiate their appetite. The way they see it, they are just introducing their top sellers to new consumers. It could be a tour of Italy package at Olive Garden,

which includes lasagna, pasta and chicken, or even dynamite shrimp and orange chicken at P. P. F. Chang's. It's a win-win for these companies, because for them, both the flow of capital and the risk is entirely with their Indian partners, which naturally brings up the question of how exactly the economics work. Stay tuned. For a restaurant business, location can make or break everything. Gori Devi Diyal of the table told Akrity that while having a great product is amazing, having a great product with good rentals is a slam dunk. A casual dining outlet typically needs about 3,000 square feet in a location with high footfall.

It could be a premium mall, a business park or even an airport zone. And for it to stay profitable, Sharad Nagpal, the head of retail consulting at a real estate consultancy, said that the rent should ideally stay under 15% of sales. But restaurant real estate has just. gotten prized. Before the pandemic, FNB brands used to occupy 12 to 15% of the space in premium malls. Today, Nagpal said that that number has gone up to 25 to 30% as more people have chosen to dine out more recently. This has actually created something of a double-edged sword situation. Obviously, more demand means more revenue for the outlets. But it has also given developers the upper

hand when it comes to rent negotiations. And Bharti has actually become quite familiar with this problem. Gourmet Investments, which was set up in 2012, turned meaningfully profitable only in F.R. 25. Toffler, a company information site, reports that Gorme investments, EBIDDA in FI 25, came in at $11,000. Now, with Olive Garden, Bharti seems to be trying to tilt the rent man in its favor. The outlet sits right next to one of the money. of Gourmet Investments own bed, a P.F. Chang's at Worldmark Aerocity, which happens to also be

a commercial complex built by Bharty real estate itself. A Delhi restaurant operator said that the rentals there run at about 600 to 800 rupees per square feet. To justify that cost, and to fit it into the 15% of sales benchmark, a brand needs monthly sales of about 1.2 to 1.6 a back of the envelope calculation shows that assuming it's a 100-seat restaurant with an average order value of 1500 rupees per person, that means turning tables at least three times a day. And even then, a restaurant at Wordmark would need nearly two years to start breaking even. But even if it were to start breaking even, the risks don't just go away. Take the example of Red Lobster, a seafood chain in the US, which was pushed into bankruptcy after it got locked into long-term leases with its owners,

even at unprofitable locations. Despite the risk, because Indians are dining out more than ever, Bharti is betting that the trend holds. But scaling casual dining means getting the basic spot on every single time. The food, the service, the staff, the location at every single outlet. And with restaurants on its own turf, Bharti's ambition to, scale may be resting on its ability to solve the location problem first. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news

platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted. and produced by my colleague Rachel Virgis and edited by Rajiv Sien.