Hyderabad’s emergence as the epicentre of small-scale Quick Service Restaurant (QSR) chains in India is a phenomenon deeply rooted in the city's unique blend of infrastructure, entrepreneurial spirit, cultural diversity, and strategic economic positioning. The city has become a fertile ground for F&B startups, much like Silicon Valley is for tech startups, fostering innovation and scaling potential in the QSR segment. Most of the small scale food startups in any tier 2 or tier 3 cities, the origin is mostly from Hyderabad. Not just these new food startups are fueling the growth of new food entrepreneurs across India, but also helping in bringing unorganised food business into an organised umbrella, moving towards ‘vocal for local’ approach. 

Strategic Infrastructure and Urban Development

Hyderabad's transformation into a QSR hub is inextricably linked to its robust infrastructure development. The city's Strategic Road Development Plan (SRDP) has played a pivotal role in enhancing connectivity, which is critical for the success of QSR chains that rely on efficient logistics and supply chain management. The construction of flyovers, underpasses, and improved road networks has not only reduced traffic congestion but also decreased travel times across the city, enabling faster delivery times and smoother operations for QSR outlets​.

The city’s emphasis on developing world-class infrastructure has made it an attractive location for setting up both retail outlets and production facilities. The city's proactive approach in infrastructure development, including the establishment of special economic zones and IT corridors, has created a business-friendly environment that attracts both entrepreneurs and consumers. The presence of the iconic Durgam Cheruvu Cable-Stayed Bridge, connecting key commercial areas like HiTech City and Gachibowli, is just one example of how the city’s infrastructure facilitates easy access to high-footfall areas​.

Hyderabad-based Tea Time has around 2,800 outlets, providing 10,000 direct and 25,000 indirect jobs. Among cities, Hyderabad is a strong market for us. Of the 680 outlets in Telangana, 260 are in Hyderabad alone. “There is a potential to create 600 more in the city and 2,000 outlets in Telangana. We are aiming for rapid expansion in tie-2 and tier-3 cities. Instead of having a centralised organisation, the company decided to put in place a master franchisee to take care of stores in a designated region. Today, Tea Time has an agile, cost effective supply chain which ensures that tea plucked from the gardens can reach the stores within three weeks. The use of ERP, CRM and various digital technologies have streamlined the supply chain. There is an opportunity to serve 750-800 million cups of tea per month,” Uday Srinivas Tangella, founder, Tea Time mentioned in an interview.

Thriving Entrepreneurial Ecosystem

The entrepreneurial ecosystem in Hyderabad is characterised by a strong culture of innovation and risk-taking, much of which stems from the city’s significant role in the IT and startup sectors. This environment has naturally extended to the F&B sector, where a growing number of local entrepreneurs are experimenting with unique food concepts and scalable business models. The city’s supportive startup culture, bolstered by incubators, accelerators, and a growing community of investors, has enabled small QSR chains to flourish​.

Hyderabad has seen a rise in food-tech startups that are revolutionising the way food businesses operate. Brands like Zomoz and The ThickShake Factory have leveraged technology to streamline their operations, reduce costs, and enhance customer experiences. Zomoz, for example, has focused on creating a highly automated production process that minimises manual handling and ensures product consistency, which is crucial for scaling a QSR brand. This technological integration not only reduces operational inefficiencies but also makes it easier for these brands to expand into new markets both within India and internationally​. This tech-driven approach allows Zomoz to produce an astounding 2.25 lakh momos daily, contributing significantly to its impressive annual revenue of Rs 25 crore. Today, Zomoz boasts a strong workforce of 173 employees and over 75 outlets across India.

“Once the first outlet was opened in Hyderabad, Zomoz started gaining popularity and more outlets started springing up. In 2017, the company was approached by a cinema chain to supply momos in all their theatres in Hyderabad, Kerala and Vijayawada. I was happy and we readily accepted,” founder Shouvik recalls. 

Cost-Effective Business Environment

One of Hyderabad’s most significant advantages for small QSR chains is its cost-effective business environment. Compared to other major Indian cities like Mumbai or Delhi, Hyderabad offers lower real estate costs, making it easier for startups to establish their first outlets without a massive capital outlay. This affordability extends to the operational aspects of running a QSR chain, including lower costs for utilities, manpower, and raw materials. The city’s relatively low cost of living also means that consumer price sensitivity is lower, allowing QSR chains to experiment with pricing strategies that might not be feasible in more expensive markets​.

Furthermore, the government of Telangana, under which Hyderabad falls, has been proactive in creating a favourable regulatory environment for businesses. Simplified business registration processes, tax incentives, and support for small and medium enterprises (SMEs) have all contributed to making Hyderabad an attractive destination for QSR startups. The ease of doing business in Hyderabad is a significant draw for entrepreneurs who are looking to minimise the initial friction of launching a new brand​.

Cultural Diversity and Demographic Advantage

Hyderabad’s rich cultural diversity, with a population that includes a mix of locals and migrants from across India, provides a unique market for QSR brands to tap into. The city’s demographic profile is young, with a large proportion of tech-savvy professionals who are open to experimenting with new food concepts. This has given rise to a demand for a variety of cuisines, from local delicacies to international flavours, making Hyderabad an ideal testing ground for new QSR ideas​.

The city’s cosmopolitan nature has encouraged the proliferation of a wide range of QSR chains, each offering something unique to cater to different tastes. For instance, while larger brands like Ohri’s and The Drunken Monkey have capitalised on their appeal to the urban, health-conscious crowd, smaller chains like Gabru di Chaap and Lassi Corner have found success by offering affordable, comfort food that resonates with a broader audience. This diversity in offerings has contributed to a vibrant food culture in the city, with something to offer for every palate​.

Operational Efficiency and Minimal Manpower

One of the key strategies employed by Hyderabad-based QSR chains is the adoption of highly efficient operational models that minimise the need for extensive manpower. Many of these brands utilise central kitchens or cloud kitchens where most of the food preparation is done before being distributed to individual outlets. This setup allows the outlets to focus primarily on assembling and serving the food, rather than cooking it from scratch, thereby reducing the need for skilled chefs and extensive kitchen staff​.

“For us, the best part was we got all the pre opening support along with all the equipment that we have added in the kitchen, we got assistance from interior designers as well as basic needs like menu designing, board designing from the company itself. For menu and dishes as well, we get all the from the headquarter based in Hyderabad. The supply chain is smooth and we get our orders within a week of delivery,” Franchise owner of Gabru di Chaap outlet in Lucknow commented.  In Hyderabad, the chain has 11 stores and is present in several cities across India including Bangalore, Chennai, Lucknow, Vijayawada and Ahmedabad.

Innovation and Scalability

Innovation is at the heart of many successful QSR chains originating from Hyderabad. Whether it’s through the introduction of unique menu items, the adoption of cutting-edge technology, or the development of new business models, Hyderabad-based QSRs are known for their ability to innovate and scale rapidly. The ThickShake Factory, for example, revolutionised the beverage market with its extensive range of thick shakes, appealing to a niche but growing market of milkshake enthusiasts. The brand’s focus on product innovation and customer experience has allowed it to expand rapidly across India and even venture into international markets​

Scalability is another critical factor that has driven the success of Hyderabad-based QSR chains. Many of these brands have adopted the franchise model to grow their presence across the country quickly. For instance, Biggies Burger, which started as a small kiosk, expanded rapidly through a well-structured franchise model that emphasises low setup costs, standardised operations, and strong brand identity. This approach has enabled the brand to compete with global giants like McDonald’s and Burger King, positioning itself as a homegrown alternative in the competitive QSR landscape​.

Hyderabad’s rise as a hub for small-scale QSR chains is a testament to the city’s unique combination of strategic infrastructure, supportive business environment, entrepreneurial spirit, and cultural diversity. As the city continues to evolve, it is likely to solidify its position as a breeding ground for innovative F&B startups, offering lessons in scalability, innovation, and adaptability that other cities in India and beyond can learn from. The continued growth of these QSR chains not only boosts the local economy but also enhances Hyderabad’s reputation as a dynamic and forward-thinking city in the global food industry.