How ThickShake Factory scaled to 82 outlets in 13 cities with its unique thick milkshakes
During the second year of his MBA program in 2011, Yeshwant Nag Mocheria went as an exchange student to France. At that time, he visited Belgium and came across a milk shake parlour. The milkshake he tasted there was one of the best ones and left a lasting impression on him. “While I am not a food connoisseur, I understood that there was something different (thickness and consistency) in that shake when compared to what I have had back home in India,” shares he. He believed that this was a good business idea, however, did not do anything about it then.
Eventually, after the completion of his MBA, he got placed in TCS as a business consultant. After a year and half went by, his urge to do something on his own set in. He realised that no one was actually making thick shakes that he tasted in Belgium and Yeshwant and his brother, Ashwin, brain stormed the idea and decided that there was a good opportunity ahead of them. Ashwin had worked with Amul Icecream and had good insights on this business. This was the genesis of The ThickShake Factory.
The duo did some basic research where they interviewed about 250 to 300 people to understand the market for milk shakes. “Interestingly, 97 per cent of them said they won’t buy thickshakes, that too if it was above Rs. 100 price point,” shares Yeshwant. But they still went ahead and setup their first centre in Hyderabad in 2013 as they were convinced that the customers did not have an idea about the kind of milkshake the duo were planning to make for them. “Or that’s how we comforted ourselves,” jokes Yeshwant. Yeshwant quit his job in 2013 and the duo secured a space in a mall in Hyderabad for their store, despite high rentals. They paid a lot of attention to the name they gave their business. “We wanted to change the perception of milkshakes in India. The reason behind calling it thick shake is to differentiate our shakes from a normal milkshake,” recalls Yeshwant. They set up The Thick Shake Factory as the first premium thick shake brand from India, which provides quality thick shakes for shake lovers.
The journey there on…
“It took us six months to understand the business,” admits Yeshwant. For one whole year, the duo had only one outlet in Hyderabad, even though they got franchisee enquiries soon after they opened their first outlet. “My brother and I were on our feet and were interacting with the customers and understood their needs. This helped us grow further,” says the co-founder. Once they were more confident, they got space in a drive-in in Hyderabad and opened a second outlet 7 to 8 months after their first one was set up.
Our outlets are on the main road where people don’t have to take much of an effort to get there
The duo found that they got a good response for their second outlet, in fact it 2.5 to 3 times better than the sales in the first outlet sales. With the loan that they had raised (from the bank and from their father), they opened further stores. The plan was to open 4 outlets in one year. “Fortunately, our sales was good and profits were ploughed back and instead of 4 we ended up with 11 outlets at the end of second year,” says Yeshwant. The company started spreading its wings outside Hyderabad after two years of operations. It opened its first store in Bengaluru’s Brigade road. “That didn’t work as the location was wrong. We learnt from our mistakes,” recalls he. And it helped them understand the importance of choosing the right location. The company prefers high streets over malls and looks for a ground floor property near some F&B outlets, anywhere with high density, footfall and purchasing power of the consumer. “Our outlets are on the main road where people don’t have to take much of an effort to get there,” says he. It now has 82 operational outlets and is present in 14 cities. It aims to reach 100 outlets in the next two months.
Franchisee selection and management
The company got a lot of enquiry for franchisees. “While there were many enquiries, we were very sceptical initially. However, after almost 2.5 years of setting up operations, we opened our first franchisee outlet in Hyderabad,” shares he. The team took their time and tested the company out for a while to ensure that they could replicate their model well. In the last one year, they have expanded aggressively through franchisees with almost 65 per cent of its outlets being run by franchisees.
“Almost 98 per cent of the franchisees are our customers who totally love our shakes and understand the business opportunity it presents,” admits Yeshwant. Having said that, the team looks for two things before they agree to a franchise partnership. One, they see how much the franchisee is passionate about food business; two, how much time and effort they are willing to put it into the business. “If the income he can generate from the business means something to him, then there is a huge rate of success,” adds he.
To ensure quality, the ThickShake team follows a simple mantra. Observe what the global chains are doing over the decades and simply replicate that. In India, F&B franchisees are on the rise now, when compared to the previous decade while the industry in the U.S. has been franchising since the 60s and the 70s. The company has integrated backwards by makings its raw materials- ice creams – in its factory in Hyderabad so that it holds the entire control. “The challenge is to transport the ice cream through cold storage as the cold chain network is not the best in the country,” admits he.
The company also trains the personnel at a central location. It controls POS, billing, access to CCTV cameras and inventory module software.
Setting on the right path
What also differentiates the company is its quality and taste. “We have to live by the reputation that it is a thick shake factory,” says he. The brand is all about the energetic youth and making thick bonds. “You make thick friends and thick bonds over thick shakes,” says Yeshwant. And hence, ThickShake aims to be a vibrant brand and also has orange in its logo to signify energy.
“The market size has also increased in the last couple of years and I see a lot of optimism more than challenges,” says Yeshwant. One of the challenges the team faces is to ensure that at every point of time every customer is happy. “In the food business, it doesn’t matter how many swiggys we have. The customer should be happy every time,” shares he.
Going forward, the company aims to establish a global QSR chain. It is now present in 13 cities in south India. The company also opened its first outlet in the U.S. (California) six months back. It is bullish not only about India but also the different parts of the globe like south East Asia and Middle East. “We see a huge Rs. 2,000 crore market for the entire industry which will continue to grow,” says Yeshwant. And the ThickShake team wants to be in the forefront of it and lead the industry going forward.
Snapshot: ThickShake Factory
Founders: Yeshwant Nag Mocheria and Ashwin Nag Mocheria
Year of incorporation: 2013
Funding: Self funded
Profile: The Thick Shake Factory as the first premium thick shake brand from India, which provides quality thick shakes for shake lovers.