Leading the TGIF story in India
It was close to three decades back that this hotel management graduate embarked on an entrepreneurial journey by getting into the energy sector. This was in Indonesia in 1995. Today, Prasoon Mukherjee-owned Universal Success Enterprises (USE) is the largest developer of real estate in eastern India. This apart, the USE also owns business parks, school buildings and retail spaces. Headquartered in Singapore with operations in South and Southeast Asia, the company’s diversified business model includes projects within real estate development, renewable energy and hospitality industries.
On Friday, TGI Fridays (TGIF) announced development of 75 new restaurants throughout South and Southeast Asia over the next 10 years in partnership with Universal Success Enterprises which will play the dual role of a master franchisor and a franchise. The deal, which is expected to drive over $50 million in revenue for the US-based company over a decade, is the most significant development agreement to-date for the brand. “As per the deal, we have to necessarily build 20 per cent of the 75; the rest we can develop on a franchise model. As we wear two hats in this arrangement – that of a franchise and a franchisor, we get to approve the locations apart from supporting the ones being built by the franchises,” says Mukherjee, USE Chairman.
At present USE has three TGIFs in India while 52 more are to be developed under the new arrangement. “However, there will be a major change this time in the size of these restaurants. Earlier, TGIFs were built in very big spaces- 7,000-8,000 sq ft – but now these will be in roughly half the size. These big size restaurants are very American and it is neither possible nor feasible in India to build that huge size,” he says adding that the focus would now be on building these restaurants in hotels and business parks as the current excise rules for restaurants in shopping malls are tough and hinder business.
With these new restaurants in hotel premises, Mukherjee avers, there will be a much-relaxed environment and a more captive clientele. “We plan to keep these outlets open from breakfast to dinner as there are chances of higher footfall. Also, hotels have existing infrastructure which makes things easier. Then, they also need a restaurant so this arrangement will benefit both the parties. And if the hotel has a separate entrance-exit, all the better,” says Mukherjee who began his career as a trainee with ITDC.
The USE CEO informs that they are open to exploring Tier II cities to begin with, and might explore Tier III cities as well. “It all depends on our franchises as they understand the market better. Also, the way forward is concentrating on smaller cities which are developing. We have a very large territory to cover i.e. South Asia except Pakistan and then all countries minus Malaysia and Philippines as they have existing franchises in Southeast Asia,” says Mukherjee, adding that the overall investment into this business will be around Rs 600 crore in India and around Rs 750 crore for the two regions. Plans are also underway to build a few Friday’s American bars in areas with busy business parks and young population.
USE acquired TGIF restaurant business in India in 2019. When questioned on how has it been over the last three years, given that the world faced the worst ever crisis for almost the same period, Mukherjee says the pandemic period helped them a lot. “Some of our franchises were loss-making propositions and had no chance of revival so it was easier exiting from these locations or may be negotiating better,” says Mukherjee who is known to introduce new restaurant brands and concepts to the Southeast region like Outback Steakhouse in Southeast Asia in places like Singapore, Malaysia, Indonesia, Thailand and Philippines. “We will not look into casual dining anymore though we may add some doughnut or coffee companies. But this also will happen only after a couple of years, not immediately,” he says.
In India, USE commenced real estate development in 2003 with Kolkata West International City township spread over 377 acres which then became the country’s first Foreign Direct Investment (FDI) project. A couple of years later, in 2005, the company-initiated development of West Bengal’s first IT park in an area of over 50 acres and then executed another 100-acre mixed-use residential township.
Though Mukherjee predicts an exponential growth for the Indian hospitality industry in the near future, he opines that it will happen only if excise rules are relooked into. “One also needs to look into the rental schemes as a place is taken on rent based on gross area. The customer today is young and outgoing and doesn’t want to cook at home. Like in the USA, it is getting more economical to eat outside than cook at home,” says the USE Chairman who feels closer to his energy business and F&B space amid all his business verticals.
Mukherjee opines that USE seems set for a bright future as it is a debt-free entity. “Even with upcoming recession, we should have more opportunities to acquire as our balance sheet contains no debts. I think we will be able to double our business in the next three-four years,” he says.
