Food & Restaurant Business

Friday night in Vikram's kitchen

It's 8:15 PM on a Friday in Dehradun. Vikram's franchise restaurant — a well-known biryani brand — is in full swing. The Swiggy tablet is beeping non-stop: 47 orders in the last three hours. Every dine-in table is occupied. Two delivery riders are waiting by the counter, helmets on, scrolling their phones. In the kitchen, four staff are moving like clockwork — one on the tandoor, one plating, one packing delivery orders, one washing dishes so fast the steel clatters.

From the outside, it looks like a dream. Packed house. Orders flowing. Brand name glowing in neon above the door.

But here's what you don't see: last month's profit was ₹38,000. On a revenue of ₹4.2 lakh. After rent, staff salaries, raw materials, royalty to the franchise brand, Swiggy commissions, electricity, gas, packaging, and GST — Vikram took home less than what his manager earns.

"Log sochte hain restaurant mein paisa hi paisa hai," Vikram says, wiping down a counter himself because one helper called in sick. "Nobody sees the 14-hour days, the spoiled stock, the delivery refunds, the staff who quit without notice."

This chapter is about the food business — one of the most popular, most romanticized, and most brutal industries to be in. Everyone thinks they can run a restaurant. Very few understand what it actually takes.

If you're reading this and thinking about starting a food business — good. But read this chapter carefully before you invest a single rupee.

Types of food businesses

"Food business" is not one thing. It's a spectrum, and each type has very different economics:

1. Full-service restaurant (dine-in)

A physical space where customers come, sit, eat, and pay. You need a location, furniture, kitchen, staff, ambience, parking consideration, and liquor license if you serve alcohol.

Investment: ₹10-50 lakh+ depending on city and size Break-even: Usually 12-24 months Key challenge: High fixed costs (rent + staff) whether customers come or not

2. Dhaba / casual eatery

Simpler setup. Fewer frills. Often roadside or near bus stands and markets. Lower investment, faster break-even, but margins are thin because prices are low.

Investment: ₹2-8 lakh Key challenge: Consistency and hygiene at low price points

3. Cloud kitchen (delivery only)

No dine-in. No front-of-house staff. No expensive location needed. Just a kitchen in a low-rent area, cooking for delivery apps.

Investment: ₹3-10 lakh Key challenge: 100% dependent on delivery platforms and their commissions

4. Catering

You cook for events — weddings, corporate functions, parties. No fixed location needed (you can cook from a rented kitchen or on-site). Revenue comes in large chunks but irregularly.

Investment: ₹2-5 lakh (equipment + transport) Key challenge: Seasonal demand, large upfront costs per event, reputation-dependent

5. Tiffin service / subscription meals

Daily meals delivered to offices, PG accommodations, bachelor flats, hostels. Predictable recurring revenue.

Investment: ₹1-3 lakh Key challenge: Logistics, consistency, thin margins

6. Packaged food (FMCG)

You make a food product — pickle, chips, spice mix, namkeen, health bars — package it, and sell through retail or online.

Investment: ₹2-15 lakh depending on scale and compliance Key challenge: FSSAI compliance, shelf life, distribution, branding

7. Bakery / confectionery

Cakes, bread, cookies, pastries. Can be a physical shop, home-based, or delivery-only.

Investment: ₹3-12 lakh Key challenge: Perishability, skill-dependent, equipment costs

8. Food truck

Mobile food business. Lower rent (just parking fees), novelty factor, but limited menu and weather-dependent.

Investment: ₹5-15 lakh (truck + equipment + permits) Key challenge: Permits, parking, limited capacity, weather

Choose your model before you invest. A person who dreams of a cozy cafe and ends up running a cloud kitchen will be miserable. A person who starts a full restaurant when they should have tested with a tiffin service will burn through capital. Match your model to your capital, skills, and lifestyle preference.

Food costing: the 30% rule

This is the single most important number in the food business. Get this wrong, and no amount of sales will save you.

Food cost should be approximately 30% of your selling price.

What does this mean? If you sell a plate of rajma-chawal for ₹120, the raw ingredients in that plate — rajma, rice, oil, spices, onion, tomato, garnish — should cost you roughly ₹36.

Food Cost % = (Cost of Ingredients / Selling Price) × 100

Target: 28-35% for most food businesses

Here's how Vikram's biryani breaks down:

Notice something? The biryani — the hero item — runs at about 30%. The raita and gulab jamun are high-margin add-ons. The cold drink is terrible margin (branded MRP, can't mark up). This is why Vikram pushes combos that include raita and dessert — it brings the overall food cost down.

The other 70% covers: rent, salaries, electricity, gas, packaging, delivery commissions, maintenance, marketing, loan EMI, and finally — your profit.

If your food cost creeps to 40-45%, you're in trouble. If it's above 50%, you're actively losing money on every plate sold.

Pushpa didi's chai has a food cost of about 40% (₹8 cost on ₹20 selling price). But she has almost no staff cost (one helper), no delivery commissions, minimal rent. Her model works because the other costs are very low. Food cost % alone doesn't decide profitability — it's the total cost structure that matters.

How to track food costing

1. Recipe cards: Write down every dish with exact ingredients and quantities. This is your standard recipe. No "andaaza" (guessing) in a business kitchen.

2. Yield tracking: 1 kg of chicken doesn't give you 1 kg of cooked meat. Bones, water loss, trimming — actual yield is about 65-70%. Factor this in.

3. Weekly stock-taking: Count your inventory every week. Compare what you bought vs what you should have used (based on sales). The difference is waste, theft, or poor portioning.

4. Plate cost vs menu price: Every single item on your menu should have a calculated plate cost. Update it monthly because ingredient prices change — especially vegetables, chicken, and cooking oil.

Menu engineering: stars, workhorses, puzzles, and dogs

Not every item on your menu is equal. Menu engineering is a framework that classifies your dishes into four categories based on two factors: popularity (how many orders) and profitability (how much margin).

Stars (High popularity + High profit)

Your best items. Promote these aggressively. Put them first on the menu. Feature them in photos. These items carry your business.

In Vikram's menu: Chicken Biryani combo (biryani + raita + gulab jamun). Ordered frequently, good margin on the combo.

Workhorses (High popularity + Low profit)

Customers love these, but the margin is thin. You can't remove them (customers expect them), but try to improve the margin — negotiate better ingredient prices, reduce portion slightly, increase price by ₹10-20 if the market allows.

In Vikram's menu: Plain Chicken Biryani without combo. Everyone orders it, but the margin is lower without add-ons.

Puzzles (Low popularity + High profit)

Great margin, but nobody orders them. Either your marketing is weak, the name is unappealing, or it doesn't fit your customer base. Try repositioning — better description, server recommendations, limited-time promotion.

In Vikram's menu: Mutton Biryani. Excellent margin, but at ₹449 in Dehradun, most customers pick chicken instead.

Dogs (Low popularity + Low profit)

Nobody orders them, and even when they do, you barely make money. These items clutter your menu, waste inventory, slow down the kitchen. Remove them.

In Vikram's menu: Veg Fried Rice. Rarely ordered (people come for biryani, not fried rice), and the margin is poor.

Action: Go through your menu once a quarter. Classify every item. Promote stars, optimize workhorses, fix or reposition puzzles, eliminate dogs. A smaller, focused menu is almost always better than a large, scattered one.

Kitchen efficiency and waste management

Food waste is profit thrown in the bin. In India, the average restaurant wastes 15-20% of the food it purchases. That's devastating to margins.

Sources of waste

1. Over-purchasing: Buying more than you need because you're afraid of running out. Especially with perishable items (vegetables, dairy, meat).

2. Poor storage: Tomatoes rotting because they weren't refrigerated. Spices losing potency because containers weren't sealed. Cooking oil going rancid.

3. Over-portioning: Your recipe says 250g rice per plate, but the cook is scooping 350g because "it looks better." Over 100 plates, that's 10 kg of extra rice — about ₹400 wasted daily, ₹12,000 monthly.

4. Prep waste: Peeling, cutting, trimming. A trained cook wastes less than an untrained one.

5. Spoiled orders: Food sent back, wrong items prepared, delivery returns.

How to reduce waste

• FIFO (First In, First Out): Use older stock first. Label everything with date of purchase.
• Standardized portions: Use measuring tools — ladles of specific sizes, weighing scales, portioning containers. No "andaaza."
• Daily prep planning: Estimate tomorrow's demand based on past data. Don't prep for 200 covers if you average 80.
• Cross-utilization: Day-old bread becomes croutons. Vegetable trimmings go into stock. Overripe tomatoes become sauce. Creative reuse reduces waste.
• Staff training: Your line cooks need to understand that waste = money lost. Make it part of their KPIs.

Vikram reduced his food waste from 18% to 9% in three months just by implementing portion control and FIFO. That saved him roughly ₹25,000 per month — more than half of his previous profit.

FSSAI licensing

Every food business in India needs an FSSAI license. No exceptions. There are three types:

1. Basic Registration

• For: Small businesses with annual turnover up to ₹12 lakh
• Examples: Street vendors, home-based food businesses, small tiffin services
• Fee: ₹100 per year
• Process: Simple online form on the FSSAI website. Usually approved in 7-15 days.

2. State License

• For: Businesses with annual turnover between ₹12 lakh and ₹20 crore
• Examples: Restaurants, medium-scale manufacturers, catering businesses
• Fee: ₹2,000-5,000 per year (depends on category)
• Process: Apply through the Food Safety department of your state. Inspection may be required.

3. Central License

• For: Businesses with annual turnover above ₹20 crore, or those operating in multiple states
• Examples: Large manufacturers, importers, e-commerce food platforms
• Fee: ₹7,500 per year
• Process: Apply to the central FSSAI office. Detailed documentation and inspections required.

Which one do you need?

Do not skip this. Operating without FSSAI registration is illegal, and penalties range from ₹2 lakh to ₹10 lakh depending on the violation. More practically: Swiggy, Zomato, Amazon, and Flipkart will not list you without a valid FSSAI number. It's printed on every food label. Customers check.

Hygiene and food safety

This section is non-negotiable. Not just because of regulations — because people are eating what you make. Their health is in your hands.

The basics that every food business must follow

1. Clean kitchen, always. Not "cleaned once a day" — wiped down between orders. Countertops, chopping boards, equipment. No compromise.

2. Handwashing. Every staff member washes hands before handling food, after handling raw meat, after using the restroom. Soap and water, not just a wipe on the apron.

3. Separate raw and cooked. Raw chicken on the same counter as cooked rice = food poisoning. Different chopping boards, different storage areas, different utensils.

4. Temperature control. Hot food stays hot (above 60°C). Cold food stays cold (below 5°C). The "danger zone" between 5°C and 60°C is where bacteria multiply fastest. Don't leave food at room temperature for more than 2 hours.

5. Pest control. Monthly pest control treatment. Keep doors closed. Cover all food. Check for rodent droppings. Cockroaches in the kitchen = shut-down risk.

6. Water quality. Get your water tested. RO/UV is standard for drinking water served to customers. Cooking water should also be clean.

7. Staff health. Any cook with a fever, cough, diarrhea, or skin infection must not handle food. Period. No "adjust kar lo."

8. Date labels on storage. Every container in the fridge should have a date. No mystery boxes. "When in doubt, throw it out."

A single food poisoning incident can destroy a restaurant. One bad review saying "I got sick after eating here" on Google or Zomato will cost you more than 100 good reviews can recover. Hygiene is not an expense — it's insurance.

Delivery platforms: the Swiggy/Zomato trap

Let's talk about the elephant in the room.

In 2024-25, Swiggy and Zomato together process about 75% of all online food orders in India. If you're in the food business and want delivery orders, you almost certainly need to be on one or both platforms.

But here's what they charge:

Total effective cut: 22-30% of your order value.

Let's say a customer orders ₹500 worth of biryani on Swiggy. Here's what actually happens:

Customer pays:                    ₹500
Swiggy commission (22%):        - ₹110
Payment gateway (2.5%):         - ₹12.50
GST on Swiggy commission (18%): - ₹19.80
-----------------------------------------
You receive:                      ₹357.70

Your food cost (30%):           - ₹150
Your packaging:                 - ₹25
-----------------------------------------
Left for rent, staff, etc:        ₹182.70

On a ₹500 order, you get ₹357 and after food cost + packaging, you have ₹182 to cover everything else. That's tight.

So should you quit delivery platforms?

No. But you need to be strategic:

1. Use platforms for discovery, not dependency. When a new customer orders on Swiggy, include a flyer in the packaging: "Order directly: call/WhatsApp [number] and get 10% off." Build your direct order channel.

2. Price differently. Many restaurants charge 10-15% more on Swiggy/Zomato than dine-in. This is perfectly legal and increasingly common. Set your "delivery menu" prices to absorb some commission.

3. Optimize your delivery menu. Not everything on your dine-in menu should be on delivery. Remove items that don't travel well, items with low margins, and items that need complex packaging.

4. Watch your ratings. On delivery platforms, your rating is your lifeline. Below 4.0 and you start losing visibility. Respond to reviews. Fix recurring complaints. Package food so it arrives looking good.

5. Consider going direct. Tools like Thrive, Petpooja, DotPe let you build your own ordering system with much lower fees (2-5%). Combine with WhatsApp ordering for regular customers.

The cloud kitchen model

A cloud kitchen (also called ghost kitchen or dark kitchen) is a food business with no dine-in, no storefront, no waiters. Just a kitchen, cooking for delivery.

Advantages

• Lower investment: No fancy location, no furniture, no decor. A 200-300 sq ft kitchen in a back lane is enough.
• Lower rent: You don't need foot traffic. Back lanes, industrial areas, basements — wherever rent is cheap and zoning allows.
• Multiple brands from one kitchen: You can run "Vikram's Biryani" and "Desi Bowl" and "Wrap House" from the same kitchen. Same staff, same equipment, different menus on different delivery apps.
• Faster to start: 45-60 days from decision to first order, compared to 4-6 months for a dine-in restaurant.

Disadvantages

• 100% platform-dependent: If Swiggy or Zomato changes their algorithm, commission, or policies — you're at their mercy.
• No customer relationship: You never see your customer. No loyalty. They're loyal to the platform, not to you.
• Crowded space: In cities like Dehradun, Haridwar, and Rishikesh, cloud kitchens have multiplied rapidly. Competition is fierce.
• Quality perception: Some customers perceive cloud kitchens as lower quality because there's no physical restaurant to visit.

Vikram's friend Gaurav's cloud kitchen

Gaurav started a cloud kitchen in Dehradun's Patel Nagar — 300 sq ft, ₹8,000 rent. He runs two brands: one for biryani, one for momos. Total investment: ₹4.5 lakh (equipment + initial stock + 3 months' rent + FSSAI + Swiggy/Zomato onboarding).

Monthly revenue: ₹2.8 lakh Food cost (32%): ₹89,600 Rent: ₹8,000 Staff (2 cooks + 1 helper): ₹35,000 Packaging: ₹18,000 Platform commissions (~24%): ₹67,200 Electricity + gas: ₹12,000 Other: ₹8,000 Monthly profit: ~₹42,200

Better than Vikram's franchise — with less than one-third the investment. But Gaurav works 12-hour days, handles his own delivery issues, and lives in constant fear of a bad rating tanking his orders.

Packaged food business: Ankita's story

Ankita grew up in Bageshwar. Her grandmother made the best mixed pickle in the entire valley — a recipe passed down through four generations, using local pahadi spices and seasonal ingredients. After college, Ankita decided to turn it into a business.

She started simple: making 50 jars at home, selling through WhatsApp to friends and family. The feedback was overwhelming. People wanted more. They wanted to gift it. They wanted it shipped to Delhi, Mumbai, Bangalore.

That's when Ankita realized: making great achar is one skill. Selling it as a packaged food product is an entirely different business.

What Ankita had to figure out

1. FSSAI compliance She registered for a Basic FSSAI license initially (turnover under ₹12 lakh). When she crossed that threshold, she upgraded to a State License. The process took 3 weeks and required an inspection of her production space.

2. Labeling requirements Every packaged food product in India must display:

• Product name
• List of ingredients (in descending order of quantity)
• Net quantity/weight
• FSSAI license number and logo
• Manufacturer name and address
• Date of manufacture
• Best before / expiry date
• Nutritional information (per 100g/100ml)
• Veg/Non-veg symbol
• MRP (inclusive of all taxes)
• Batch/lot number
• Storage instructions
• Allergen declaration (if applicable)

Missing even one of these can get your product pulled from shelves or e-commerce platforms.

3. Shelf life testing How long does the pickle last? Under what storage conditions? Ankita had to get her product tested at a NABL-accredited lab. The test cost ₹3,000-5,000 per product variant. The lab report tells you the actual shelf life — you can't just guess "6 months" and print it.

4. Packaging Her initial glass jars looked beautiful but broke during shipping. She switched to PET jars with tamper-evident caps — food-grade, leak-proof, lighter, cheaper to ship. She got custom labels designed for ₹5,000 and printed 2,000 labels for ₹4,000.

5. Pricing Her cost per jar: ₹85 (ingredients ₹40, jar + cap ₹18, label ₹3, labor ₹15, packaging for shipping ₹9). She sells retail at ₹249. On Amazon, after commission (25-30%) and shipping: she nets about ₹155. Margin per jar: ₹70 on Amazon, ₹164 on direct orders.

This is why Ankita pushes hard for direct orders through her website and Instagram.

Pricing for food: perceived value matters

Food is one of the few categories where perceived value can dramatically exceed actual cost — or dramatically undercut it.

A plate of dal-chawal costs roughly the same to make whether you serve it in a roadside dhaba or a boutique restaurant. But the dhaba charges ₹50 and the restaurant charges ₹350. The difference isn't the food — it's the experience, the ambience, the plating, and the brand.

Pricing principles for food

1. Anchor your price to the customer's expectation, not just your cost. If your target customer thinks a good biryani in Dehradun should cost ₹250-350, price within that range. If your costs don't work at that price, reduce costs — don't price yourself out of the market.

2. Round numbers feel expensive. Just-below numbers feel like a deal. ₹300 feels more expensive than ₹299. ₹250 feels more expensive than ₹249. This isn't trickery — it's how human psychology works. Use it.

3. Combos increase ticket size while reducing perceived price. "Biryani + Raita + Gulab Jamun: ₹399" (individual total ₹417). The customer feels they got a deal. You sold three items instead of one, and your food cost on the combo is better because raita and dessert are high-margin.

4. Don't use ₹ signs on the menu. Research shows that menus without currency symbols make people spend more. "Chicken Biryani ... 299" feels less like "spending money" than "Chicken Biryani ... ₹299". Small detail, real impact.

5. Photography increases orders by 30%+. Invest in professional food photography for your menu, Swiggy listing, and Instagram. Good photos sell food. Bad photos kill appetite. This is not optional.

Staff management in the food industry

Food is a high-turnover industry. In India, annual staff turnover in restaurants is 80-100%. That means if you have 5 employees, expect 4-5 of them to leave within a year.

Why turnover is so high

• Long hours (10-14 hours daily, including weekends and holidays)
• Low base pay (₹10,000-18,000 for kitchen staff in tier-2 cities)
• Physically demanding work (heat, standing, repetitive motion)
• No career progression visible to the employee
• Better-paying options (delivery riding for Swiggy pays more than cooking for Swiggy, ironically)

How to manage this

1. Pay above market rate. If the going rate for a cook in Dehradun is ₹14,000, pay ₹16,000. The ₹2,000 extra costs you ₹24,000/year but saves you the ₹30,000-50,000 cost of finding, hiring, and training a replacement.

2. Treat them like humans. Provide meals (two meals during shift is standard). Give one weekly off. Don't yell. Don't insult. This sounds basic, but walk into most Indian kitchens and you'll see why staff leave.

3. Cross-train. Every cook should know at least two stations. This way, if one person is absent, the kitchen still runs. Don't be dependent on one "master chef" who holds you hostage.

4. Document everything. Recipes should be written down with exact measurements. Your business should be able to run even if your best cook leaves tomorrow. If it can't, you have a people-dependency problem, not a business.

5. Profit-sharing or incentives. If monthly revenue crosses ₹X, every staff member gets a bonus of ₹Y. Aligned incentives reduce turnover and improve effort.

Common mistakes in the food business

After talking to dozens of food entrepreneurs across Uttarakhand, here are the patterns that cause failure:

Mistake 1: "My food is amazing, so the business will work"

Great food is necessary but not sufficient. You also need good location (or good online presence), pricing, marketing, staff management, financial discipline, and compliance. The graveyard of failed restaurants is full of great cooks who were terrible businesspeople.

Mistake 2: Starting too big

A 2,000 sq ft restaurant with 60 seats, designer interiors, and a 40-item menu — when you've never run a food business before. Start small. Test with a cloud kitchen, a stall, a tiffin service. Prove the demand before you invest big.

Mistake 3: Ignoring food costing

"Main andaaze se daal deta hoon." That casual handful of extra paneer, those generous portions — they add up. If you don't know your exact food cost per dish, you don't know if you're making or losing money.

Mistake 4: Over-dependence on delivery platforms

Building 90% of your revenue on Swiggy/Zomato is building on rented land. One policy change, one algorithm tweak, one suspension of your listing — and your business collapses overnight. Build parallel channels: dine-in, direct delivery, WhatsApp orders, catering.

Mistake 5: Not tracking daily numbers

Successful food business owners check these numbers every single day:

• Total revenue (dine-in + delivery + direct)
• Number of orders
• Average order value
• Food cost for the day (purchases)
• Staff attendance
• Customer complaints/returns

If you only look at your numbers monthly, you'll discover problems 30 days too late.

Mistake 6: Copying trends blindly

"Cloud kitchen chal raha hai, toh main bhi kholunga." Every model works for someone and fails for someone else. Understand why a model works, whether those conditions exist for you, and whether you have the skills and temperament for it.

Mistake 7: Skipping FSSAI and hygiene

Some people think "chalta hai, small business hai" and skip licensing. Until a food safety inspector shows up, or a customer files a complaint, or an e-commerce platform rejects your products. Compliance is not optional. It's the foundation.

The real question

Vikram sits down at 11:30 PM after closing. The kitchen is finally quiet. He opens his notebook — old habit from before the POS system — and writes down today's numbers.

Revenue: ₹22,400 (good Friday). He estimates food cost at around ₹7,000. Swiggy commission today: about ₹2,800. Staff cost for the day: roughly ₹2,300. Rent per day: ₹1,333. Electricity and gas: about ₹800. Packaging: ₹600. Franchise royalty for the day: ₹1,792. Other: ₹500.

Profit for the day: roughly ₹5,275.

On a great day. On a Tuesday? Maybe ₹800. On a rainy Monday? Possibly negative.

"The food business is not about one Friday night," Vikram tells himself. "It's about 30 days averaged. 365 days sustained. And whether, at the end of the year, I've built something worth keeping."

He looks at the Swiggy rating: 4.3 stars. He thinks about Gaurav's cloud kitchen, leaner and more profitable. He thinks about Ankita's packaged food — scalable, not tied to a kitchen 14 hours a day.

There's no single "right" food business. But there is a right way to run one: with clear numbers, controlled costs, good people, legal compliance, and the understanding that this industry rewards discipline, not passion alone.

Passion gets you to open the kitchen. Discipline keeps it open.

Chapter checklist

Before starting a food business, make sure you can answer these:

• Which type of food business matches my capital, skills, and lifestyle?
• What is my food cost percentage for each menu item?
• Have I classified my menu items (stars, workhorses, puzzles, dogs)?
• Do I have systems for waste reduction (FIFO, portion control, prep planning)?
• Do I have the correct FSSAI license for my scale?
• Are my hygiene and food safety practices documented and enforced?
• What is my strategy for delivery platforms vs direct orders?
• Have I calculated my full unit economics (not just food cost, but ALL costs)?
• Do I have a daily tracking system for key numbers?
• Can my kitchen run if any one person is absent?

The food industry has the lowest barrier to entry and one of the highest failure rates. The businesses that survive are not the ones with the best recipes — they're the ones with the best systems.