When his own restaurant in Dubai started sinking because of Covid-19, Dheeraj Kumar, 38, returned home to Bihar and got a smart idea: Make money by helping people start a similar business -- selling meals on wheels -- after they lost their livelihood for the same reason.
The Patna-born entrepreneur returned to his hometown, leaving behind his restaurant The Fish & Chips Room in Dubai, which he had run for a decade. Intense competition had started eroding margins, and the pandemic drilled the last nail in the coffin.
Looking out for new-age food opportunities in Tier2-Tier3 cities, he came up with the idea of setting up Cart Club, a proprietorship firm which designs and manufactures food carts.
He says the company has begun well, being profitable with a small margin from the day it commenced operations. "Currently we are just making 5%-6% per vehicle. The idea is not to make instant money but to help people and set up the business first.”
The start-up has already sold 25 vehicles, each costing Rs 2 lakh to Rs 2.5 lakh, and is now booked for four months with 10-12 orders. It is planning to expand to neighbouring states such as West Bengal and Jharkhand, evaluating refurbishing vehicles for vegetable vendors, aiming for a turnover of Rs 2.5 crore by March next year.
Kumar who has a degree in hotel management from Institute of Hotel Management, Ahmedabad, says his company develops the menu, trains staff and provides operating guidelines to customers besides getting them necessary approvals from the FSSAI and other departments. Cart Club has also tied up with a Noida-based consultancy to provide employees to cart owners if needed.
"The idea is to provide complete hand holding. You just need to start your business once you get the cart from us," Kumar told Moneycontrol.
He started Club Cart in partnership with his friend Raj Abhishek, who was running Raj Engineering in Patna for redesigning carts for small vendors. Kumar brings to the table his hospitality experience, while Abhishek looks after the technical aspects.
The company has partnered with Tata Ok, a unit of Tata Motors which sells used trucks. Cart Club buys vehicles such as Tata Ace and converts them into food carts by refurbishing them and installing kitchen fittings.
About 80% of Cart Club’s customers are people who lost their jobs because of the pandemic – a situation that Kumar could easily relate to.
"Covid disrupted my business in Dubai and when I came back, I saw that the situation here was no better. People were losing jobs every other day. I spent around three-four months trying to understand which business had growth potential in this market. I wanted to do something in the hospitality space but wasn't sure where to begin from. Soon, I realised that even though people had reduced their spending on discretionary purchases, everyone still wanted to enjoy a good meal with family. We floated out the concept and in no time received demand from multiple people who had lost jobs and wanted to start something of their own," said Kumar.
"People in small towns have aspirations as well as disposable incomes but there's always a lack of avenue. There are either street food vendors or fancy restaurants. The middle layer is missing. While food trucks are a rage in western countries, the idea has still not matured in India, specially in a town like Patna," he added.
Trucks delivered by Cart Club have started selling wood oven pizzas and continental food apart from the regular Chinese cuisines across Patna.
While the concept of food-trucks sounds fancy, the segment has been marred with red tape.
"Currently we are just making 5%-6% per vehicle. The idea is not to make instant money but to help people and set up the business first, says Dheeraj Kumar, founder, Cart Club
"As long as you ensure that there is enough hygiene and protocols are maintained food-trucks are the business that should be nurtured by the government. An entrepreneur with skills and limited cash outflow can definitely look at it as an avenue," said Gurbaxish Singh Kohli, President, National Restaurant Association of India.