Yazu Hospitality targets double-digit growth with 20 pc revenue jump next year

Yazu Hospitality is rapidly growing its restaurant chain. The company operates eight outlets across five cities with three brands. They are planning to open more outlets this year and are launching in Sri Lanka soon. Yazu Hospitality is also evaluating new locations in major Indian cities.

Yazu Hospitality is building a multi-brand, design-led dining portfolio, scaling from its 2019 inception to 8 outlets across five cities, with a strong double-digit growth trajectory and profitability-led expansion, Ranbir Nagpal, co-founder, Yazu Hospitality, told ETRetail.

"We started in January 2019, and today we operate 8 outlets across Mumbai, Goa, Bengaluru, Chandigarh, and Indore with three brands - Yazu, Juliet, and Kiko. Year-on-year, we are seeing consistent double-digit growth," he stated.

The flagship brand Yazu dominates the portfolio, contributing 85 per cent of overall revenues, with 6 out of the 8 outlets under its banner.

"Yazu is our fastest-growing and most scalable format. In most cases, we expand other brands only alongside a Yazu outlet," Nagpal said.

"We already have two outlets scheduled to open this year and are targeting another two by year-end. Internationally, we are launching in Sri Lanka next month. We are also evaluating new locations in Delhi and Mumbai, largely focusing on top metro markets," he further added.

Yazu Hospitality follows a hybrid ownership model with 5 company-owned company-operated (COCO) and 3 franchise-owned company-operated (FOCO) outlets.

"Going forward, the mix will continue with a balance as two COCO and two FOCO outlets are in the pipeline," he said.

On the financial front, the company expects its COCO portfolio to close at Rs 60 crore in revenue this fiscal.

"Next year, we are targeting a 20 per cent growth on this base," he said, adding that EBITDA margins currently stand at 15 per cent.

"Yazu outlets typically break even in the first month itself, and at a company level, we break even within two months. Our outlets are typically 3,000 sq. ft., with a capex of around Rs 15,000 per sq. ft.," he said.

Average per-customer spends (APC) stand at Rs 1,600-1,800 for dine-in and Rs 600-700 for delivery.

"About 65 per cent of our revenues come from food and 35 per cent from alcohol," Nagpal shared.

The group continues to prioritise high-street locations for better visibility and accessibility.

Growth is being funded largely through internal accruals so far, but external capital is on the horizon.

"We have been mostly family-funded till now, but we are looking at raising funds towards the end of this year. The capital will be used to scale across metros and accelerate outlet expansion," he concluded.