How to Start a Quick Service Restaurant (QSR) in Just Under Rs 5 Lakhs

How to Start a Quick Service Restaurant (QSR)in Just Under Rs 5 Lakhs

The Quick Service Restaurant, more commonly known as the Fast-food Restaurant is one the most lucrative restaurant formats among all and thus have also become the most popular choice of food business among the restaurateurs. The Takeaway or QSR format seems to be the most practical format, as the return on investment is high. You can charge the price of a casual dining menu, but not incur cost the same as you save up on the area, furniture, air-conditioning, crockery etc. However, you still need 100-150 orders to make it viable in the long run. Find out what it takes to run a successful restaurant business here.

Here we have shown the break-up of Rs 5 lakh, which we will explain in the points below.

How to start a Quick Service Restaurant in just under 5 lakhs

Steps to Open a Quick Service Restaurant 

Follow the below-mentioned steps that will help you open a Quick Service Restaurant.

1. Choosing the Location of the Quick Service Restaurant

The location is the one the most important factors which determine the success or failure of any restaurant. The takeaway should ideally be in a densely populated area, keeping the target audience in mind. Accessibility and visibility of the area are also important to attract customers. Ground floor shops, located at the front are preferred for QSRs and Takeaways.

The store shop should be at least 450 sq ft in size so as to build a good kitchen. The counter and the serving area should not exceed 100 sq feet. Thus, for 450 sq feet, the rent should not exceed Rs 40-45k. So, out of the 5 lakh investment, Rs 1,20,000 goes to the landlord, who gets two-month rent, a one month rent in advance.

You also need to make sure that the building has proper water supply and drainage facility. You must also obtain a No Objection Certificate (NOC) from the owner that he has no problem subletting his space for a food business, and also from the neighbours. The NOC is required in obtaining the Local Municipal License, and Food license.

2. Licenses Required for Opening a Quick Service Restaurant

A QSR primarily requires five licenses, namely: Food License from FSSAI, GST registration, Local Municipal Corporation Health License, Police Eating House license, and fire license. Out of all, Food license, GST registration, and Local Municipal Corporation Health License are the most important ones to have for starting of the outlet. Fire license and the likes can be acquired once you commence restaurant operations, however, it is recommended to have all the licenses in place before opening the outlet to keep yourself away from the legalities and small hiccups which come due to unavailability of these licenses.

The three licenses have to be applied separately. For Food License, you can apply through its website www.fssai.gov.in. This can also be facilitated through various agencies which charge around Rs 5,000 for the complete paperwork and license fee. The GST registration will be facilitated by any Charted Accountant. Lastly, for Municipal Corporation health license, you have to contact the local health inspector, and they will guide you through the process of acquiring the license. The license fee is nominal and will cost around Rs 3,000. Police Eating House and Fire license can be obtained once you have Municipal Corporation health license. This can be done in the first two-three months of the operations.

3. Staff Needed for Running a Quick Service Restaurant

The secret to a successful quick service restaurant is often a great team behind the counter and in the kitchen. The Chef is probably the most important person in your team, as they not only cook, and design the menu; they also lead and guide the rest of the kitchen staff. The attrition rate is extremely high in the restaurant industry, especially at the junior level. Learn how to hire better for your restaurant here.

In a takeaway kitchen, minimum of 5-6 employees is required in the kitchen. Out of them, two chefs are required who have a fair knowledge of every department of the kitchen. The salary of the chefs and helpers depends on upon their experience. The average salary of the chef at Commis level 1 is Rs 14000-Rs 15000 while the helpers and other staff salary range between Rs 6000- Rs 8000 based on their work. Apart from the kitchen employees, 2 delivery boys are required and one at the counter for taking the order. Find out how to create a Human Resource Structure for your restaurant here.

In today’s tech-time, there are a lot of third-party delivery services with whom you can tie-up for a work on per order basis. They charge somewhere around Rs 30 for the first five km and Rs 10 for every extra km. It is highly recommended to have at least one delivery boy full time and part time, even if you have partnered with a Third Party for deliveries, as a backup. These third parties will help you save the cost of the bike for delivery.

4. Kitchen Equipment and Raw Material Needed in a QSR

Kitchen equipment is a major expense for the restaurants and same is the case in a quick service restaurant. A small working table for 4 sqft can cost somewhere around Rs 6-7k. But, it is not always necessary to have everything new in the kitchen; most of the kitchen equipment can be bought old and used. This would roughly save around Rs 1 lakh. While working table, refrigerator, store racks and cupboards can be reused, burners, Tandoor, and gas pipeline should be new to avoid the added cost of repairs and gas leakages that are bound to happen. Other than the aforementioned kitchen equipment, Mixer, fry-pans, knives, cutting boards and other utensils should be bought new.

About Rs 2,30,000  is invested in the setting up the kitchen. Lastly, raw materials such groceries, packaging, dairy, and poultry will cost you Rs 20,000 for the first five days of the operations, depending upon the sale you make in the first five days.

Delia Smith gives insight on kitchen equipments needed for Quick Service Restaurant

5. Marketing of the Quick Service Restaurant

The tried and tested method of marketing and also one of the cheapest, is the pamphlets. You also need to spend some money on menu designing and logo designing, which should not cost more than Rs 2000.  For the first two months, 30k pamphlets are good enough to market your restaurant. These 30k pamphlets of good paper quality will cost you somewhere around Rs 25,000. However, you can change the quality and quantity of the pamphlets as per your budget. Find out how distributing pamphlets and flyers can boost your restaurant sales.

Apart from pamphlets, invest some money on a good billboard to attract an audience. An average billboard costs around Rs 10,000. You can also invest on an online advertisement on Social Media and Google Adwords.

6. POS and Billing Software Needed for the QSR

This is the most important and integral part of a successful operation and management of any restaurant or food outlet. Choose a niche POS that is customized to suit the requirements of a Quick Service Restaurant. Read a detailed guide on how to choose the perfect POS for your restaurant here.

The one we recommend is our very own POSist software, which is hardware independent and completely browser-based. You can use any web-enabled device such as a computer, laptop, tablet or even your mobile to generate the bills. The cost for this should not exceed more than 25000.

POS and Billing softwares needed for Quick Service restaurants

7. Staff Uniform for the QSR Employees

Staff uniforms are a critical aspect of a restaurant venture that is often ignored. It is important that all the staff members look good, hygienic and well dressed. You can choose from different types of dresses such as chef coats, smart shirts and t-shirts, and apron. At the initial stage of operations, it’s ideal to have a low-cost uniform which will save the additional cost. We recommend good t-shirts which will cost around Rs 150 per piece and if they ordered in bulk they will cost no more than Rs 120 per t-shirt. So, an amount of Rs 6000-7000 can be dedicated for staff uniform which gives a nice feel to your restaurant brand.

8. Counter and Branding the Face of the QSR

It would be best to procure the raw materials and design your own counter based on your need with a help of a carpenter. Go for a good standee and menu board at the front-end to give an overall feel of the brand. The counter and front-end will cost you somewhere around Rs 20-25k based on the design of the counter. There are other aspects that are responsible for the overall branding of the restaurant. This article will tell you how to do the branding of your restaurant.

9. Other Things Needed to Open a QSR

A Takeaway and Home Delivery outlet require one landline and at least two mobile phones. You can get a Cloud Telephony subscription that forwards the call to another designated number in case the first number is busy. You can also record the call for training purposes. This should not cost you more than 10k.
You further need to spend around Rs 8000 on electricity fitting and plumber work. Apart from that, you would require a good calculator, Fire-extinguisher, daily account books, attendance register etc.

11 COMMENTS

    • Hi Debi,

      It depends upon the serving area. Is 500 square feet is the space or less. Also, the cost of furniture depends upon the theme you want to create which is very subjective. We would request you if you could share more information on this we would be able to share more insights on the same. Regards

  1. Hi
    I found your site quite informative at least as a starting point.
    I am thinking of opening a QSR, with an investment budget of 7- 10 lakh if required.

    What all assistance/guidance can you provide to me and what are your charges for the same.
    Thanks

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