House of Malaka Spice was established by Praful and CheeruChandawarkar in Pune in 1997. The duo travelled extensively in the Southeast Asia region during their seven years stay in Hong Kong and came back to India with a collection of recipes that not only preserves the authenticity of the region, but they also infused their innovative twists to it, to create a menu that has become an aspiration for many. Praful Chandawarkar, Founder and Managing Director, Chiranjeev Restaurant and Foods Pvt Ltd (House of Malaka Spice) talks to Sumit Jha about his journey from investment banking to hospitality.
How did the journey in this industry start for you?
I come from a background of multiple education. While my first education was in hospitality, the initial days of working in the hospitality industry did not meet up with my expectations because I realised that I was not going to make the kind of money potentially working for someone. The reason I did not last more than 5 months in my first job with the ITC group. I started an enterprise at a very young age, and learnt it the hard way that when you don’t have capital, your enterprises tend to shut. I shut three enterprises before moving to Hong Kong where I got an opportunity to work in the financial sector. While I was there for seven years, me and my then girlfriend Cheeru, travelled extensively, ate local food and created a bank of regional recipes that we enjoyed. Shortly after coming back to India, I decided to go back into the food and beverage industry. I found a small space in Pune and used my reserves to start an enterprise. I started Malaka Spice.
Hospitality industry attracts passionate people, which I believe I am. All entrepreneurs journey will have its ups and downs. We have had many, but all of them have been educative for us. We are patient, and also plan our succession. I truly believe that restaurant concepts come to fruition in 30 years and die somewhere around the 100th year.
Way back then, how was the market acceptance for food that was not Indian?
Because our food was so different, and people were not willing to explore too much, it took us about two to three years to establish ourselves. We did end up spending out of our reserves during that time. To our advantage was the proximity of Pune to Mumbai – thanks to the then newly built expressway, and the international exposure that well-travelled people from Mumbai had. Plus, the IT industry in Pune had started to boom, and the city was becoming more cosmopolitan. I knew that business would be successful, and things did turn in our favour. Today, we have been around for 27 years.
Our deep knowledge of financials helped us a lot to survive and grow even in very lean periods. The nuances of understanding profit and loss, and cash flows and balance sheets and understanding how investments and savings are done, is not there in chef driven places.
How has the business grown for you and what are the future plans?
We have been profitable from the year 2000. We now have four Malaka Spice restaurants and three outlets of One China. Before Covid we had eight Malaka Spice restaurants. After covid we learnt a lot and started building cloud kitchens which have seatings. Those are the One China hybrid models, which are recession proof and work in small areas and small towns, and that is where the growth is going to come from. I feel One Chinais going to be 100 outlets in five years, whereas Malaka Spice is going to be restricted to 10.
How has the franchising route worked for you?
With Malaka Spice, we have gone the franchise route and have failed in it. We have had many issues in franchising. If the laws in India, had been as stringent and quick as in the US, we would have been more successful. Franchisees in India need to build patience. They should do what they are supposed to do – provide the space and handle the finance. We have learnt that the hard way.
In One China, the franchise route is working beautifully. They are smaller units and don’t need intense capital expenditure. Thy are quick to duplicate and the Indian palate loves Chinese food. And they are also cloud kitchens. With an investment of about rupees 20 lakhs, the return is in the range of a lakh or a lakh and a half every month, net of taxes.
What is your new management contract business?
We have a management operations business that will work under the banner of the House of Malaka. Because we promote the Artha-shastra as a thought process, we are getting contracts to run other people’s restaurants and resorts. We have chosen a resort in Mulshi (on the outskirts of Pune) because there were synergies in the new promoter of that resort. He thinks like us. This is our first management contract project. We will operate that business as per our philosophies and make sure that it becomes profitable. We are not making the same mistakes that we made with other franchisees.
Tell us about your sustainability efforts?
We make sure that all our practices are sustainable to the greatest extent possible. Entire sustainable thought process comes from keeping your mind still and knowing how much you should consume. We always advise our patrons on how much they should be ordering. It could be detrimental to our sale, but in the long run, it will be beneficial to us.
We teach sustainability. There are two case papers being used on Malaka Spice – one on sustainability and one on thriving during covid in hospitality business written by ISB and now being taught at the Harvard Business School.
What is competition for you?
We are well aware of our competition. We study them and when we can learn something from them, we learn. We always collaborate. Many restaurateurs come to Malaka Spice and they have access to all our knowledge – to survive, to do better, to be part of our Gurukul. We help them where we can. For us competition is healthy. We look at other restaurants as collaborators and not as competition. There are many good things to learn from competition or collaborations, so more the better.
What about the market size and the growth prospect?
The market size of food and beverage industry is nascent in India. I think a small town in China has ten times the restaurants that Pune has.
It is a natural progression. It is important to be understanding what utilitarian eating is. If you go to Southeast Asia – places like Thailand, Vietnam no one cooks at home. Because the food that they get is at the same price if they had cooked at home, it is clean and hygienic and is easily available. Unfortunately for us, we don’t have that. We don’t have hawkers who cook with enough water, in clean oil, with clean practices. Our unorganisedsector, which is our biggest sector, needs to improve. Our governance has to improve. They can’t be on footpaths where people are supposed to walk. They need to have designated zones, and they need to have strict health procedures applied and equipment provide. FSSAI is doing enough with the organisedsector. They are not doing anything with the unorganised sector, which they should be involved in. There is a lot to be done.
Your advice to people joining the industry.
If you come into this industry, come with a clear mind to understand the finance of it first, and not only your passion. If you only understand the passion, you will find yourself not complete in this industry. There is a lot to running a restaurant, so understand all the aspects of it – the legal, accounting, purchasing, staff leadership, etc. As a base it must be understood that you should get into this business only if you love it. If the understanding is clear, they are most welcome because this industry is the purest form of service. If they have the emotion of seva to human beings, they should be in this industry. There is no other industry that you can be in with this kind of service, and still be able to make a profitable venture out of it.
A word for the students?
Hospitality students should take it as an opportunity to understand every aspect of the industry and not just do it as a job. They should have a will to learn what the industry offers, then sky is the limit.
Have you ensured that the people working with you have the financial knowledge?
We believe that every individual who works in the House of Malaka is financially wise. A large number of our leadership core team are entrepreneurs. Very early in our career, we had a home delivery boy working for Malaka. That boy continues to work for us and went in between to work for the hotel industry for a few years and came back to us. He is one of the most adept financially, apart from me and currently is our CEO. He has allowed that knowledge to percolate down. Percolation of knowledge in our organisation goes right to the bottom. Weather they are our own teams, or people from the industry, or at NRAI, we do knowledge sharing sessions and make sure that no knowledge is hidden. The reason we do that is also because we run our entire organisation on the science of prosperity, which is a 350 BC thought. It was the philosophy of Kautilya, which is called Artha-shastra. It is the science of prosperity, and in the science of prosperity, we believe, that you should be able to share knowledge so everyone can benefit. It is with inclusive approach that we have been able to support our teams and a large number of our leadership core are entrepreneurs, supported by the House of Malaka.
Srijit and Chandrakant, who are our CEO and General Manager, own two franchise units of One China, our Chinese brand. We have inhouse florist, coconut suppliers, importer of sauces, and others. While organisations like to hold prosperity lose to their hearts, we do believe that prosperity is like a flowing river and if it does not flow, then no one benefits.
Any other plans, in terms of expansion?
I do various things. We have an educational institute called Chiranjeev Gurukul, that was formed in 2020 during covid, which teaches entrepreneurs and leaders within organisationsand companies the science of prosperity and also the development of the swamy (leader) through yog sutra. How it will help build a nation and transform it is what we are mainly concerned with. We have modules for that. We also have a school program to teach kids through stories (katha shala), a teacher training program, and a parent training program. We work with large corporates on how to transform their leadership. These are transformative programs, that lead to transforming the way they think.
I have been running a charitable foundation for the last 13 years called Live Life, Love Life Charity Foundation. We work in the space of cancer, where we help financially disadvantaged people afflicted with cancer. We raise money through various events and also have good corporate sponsors and donors that helps us not only maintain but also run the hospital which is free – it is called Vishranti, run by Care India Society. It has no cash counters. We have helped build a floor. We have a screening organization which helps in screening cancer through an initiative called Prayas. We also work with Nag Foundation where we fund some of their doctors to do this work, but also collect funds for the vaccine.
We also work in the agro-space under the name Cherish Farm that we started in 2012. It is our own farm where the first phase of the organic certification for the farm is done. We grow vegetables through ancient, Indian ayurvedic systems. We use techniques that are natural as well as organic. We have a sustainable thought process at Malaka Spice and a lot of the wet waste that we have gets composted on premises and then goes to the farm and gets into compost pits. The vegetables that grow there are brought back to our kitchen and used here. It also has an accommodation facility offering agro tourism. It is very effective in teaching people how to be sustainable and grow your own food.
I believe people who are in food business must know how to grow food. Even when I had started in 1997, I had a friend’s farm supporting us.
I also have interest in sports business. I manage the Ratnagiri Jets team of the Maharashtra Premier League, who have won two tournaments.
