Amit Jatia is vice-chairman of Hardcastle Restaurants, franchisee of McDonald’s, the fast food major, in west and south India. It was last year that the US-based McDonald's Corp opted to exit the equal joint venture it had with Hardcastle, converting it into a franchisee arrangement. Hardcastle now pays a royalty to McDonald's for use of its brand, while the latter provides its technical knowledge and expertise. Jatia, who has been running the McDonald's operation in the west & south for 15 years, spoke to Viveat Susan Pinto on a number of issues. Edited excerpts:
McDonald's is known for its training & development. How did you institutionalise this in India?
We were very clear from the beginning that we wanted skilled people. We were prepared to invest in the individuals we were hiring. Typically, we prefer to hire fresh for the front-end jobs. He or she could be a graduate or undergraduate. At the undergrad level, we even take people who have completed their 12th standard. These are put through a rigorous training programme. Class-room lectures, videos, reading material — all of this is provided to help them develop skills to be used at our restaurants. At every level, they are put through tests. If they do well they are promoted.
A fresh recruit, for instance, will first begin as crew. After training, examination and experience on the job, he or she becomes a crew trainer. After some time, he or she qualifies for the position of shift running manager, where he or she manages a team of people on a shift. After this, you have the option of moving into restaurant management. In between, if you need time out to complete your studies, we allow that. We also encourage our people to do their MBAs. As you move up in restaurant management, we send people to the Hamburger University, which is McDonald's global training centre. Training, in short, is part of our DNA.
With so much investment into people training, does the attrition rate in your business worry you?
There is nothing we can do about it. I take heart in the fact that our attrition levels are far lower than the industry. At the corporate level, our attrition is 10-15 per cent; at restaurants, 30-40 per cent. (The) Industry (level) is much higher than this.
You are also working closely with the Retailers Association of India (RAI) on training. What do you propose to do?
We propose to help undergrad colleges accommodate retail training in their course curriculum. With the explosion of retail in India, there is need for skilled manpower. Alongwith B S Nagesh (VC of Shoppers Stop) and RAI, I will be organising a symposium in Mumbai on December 23, where we will invite academia to work out ways on how retail education can be built into college-level programmes. If this clicks, it will go a long way in building awareness at the college level itself about retail and the job opportunities the sector can offer.
McDonald's has set an India target of touching 500 restaurants by 2014 from 240 now. Is this achievable, given the scramble for good locations?
As retail grows and more players step in, the situation will not get easy. What we have done is to increase the size of our development team to over 70. These people have the primary responsibility of identifying quality real estate, as well as construction of restaurants. We also have alliances with a number of people, including mall developers, oil marketing companies, owners of high-street real estate, etc. Once we identify a good property, we work with the real estate developer as a partner. Our attempt is to not undercut him over rentals or the maintenance of the property. This goes a long way in building trust, helping us move ahead with our expansion.
Given that the west and the south alone have doubled the number of McDonald's outlets in two years, how are you securing supplies?
We work closely with farmers for our sourcing requirements. Every element of a burger has been broken down and all supplies sourced locally from lettuce to buns, cheese, patties, potatoes, etc.
We are also building new capacities. A state-of-the-art bun plant is coming near Mumbai. A new patty plant is coming up in North India. We are building a new bakery in Bangalore. There is a lot of work happening on that front.
