Restaurateur Sameer Seth says the real challenge of a 12-seat restaurant is not reducing costs, but making the economics work with limited covers
Naar, his 16-seater restaurant in the forest belt beyond Kasauli, sits 45 minutes past a hill town that is itself two hours away from Chandigarh. Today, his restaurant serves 16 to 20 covers a day across lunch and dinner, at `12,000 to `15,000 per head, earning around `4 lakh a day. His own staff, by his account, are paid 50% above the local going rate, with their housing and transport covered on top.
Because there are fewer people in the room to absorb the cost, a 12-seat room, he points out, still needs exceptional ingredients, a skilled team, and a level of craft that doesn’t get cheaper simply.
“Everybody was like, ‘you’re stupid, you idiot, and you don’t know how India works,’” he recalls. “It is a sale which is way above average,” Sadhu shares, adding, “a restaurant like Naar, which is in the middle of nowhere… is a profitable restaurant, and that’s a big statement to make in today’s Indian F&B context. “The cost per guest is often significantly higher than it would be in a larger-format restaurant,” he says.
Chef Prateek Sadhu didn’t set out to make life easy for himself. The assumption goes: fewer chairs, lower overheads, smarter business maths. Sameer Seth, who runs Papa’s under Hunger Inc, disagrees. “Small-format restaurants don’t operate on lower costs; they operate on a different cost structure. Sadhu agrees: “It is a myth that if the restaurant is small, the running cost is small.
That equation is changing, says Seth. “Every seat has to work harder,” he adds, “which means every aspect of the experience, from the food and hospitality to the pacing and storytelling, has to justify its place. Sharing infrastructure and back-end support with Veronica’s and the wider Hunger Inc. group allows the team to invest more heavily in “the food, the team and the guest experience,” says executive chef Hussain Shahzad. For Hussain Shahzad, the best small-format restaurants are designed around the guest experience, not just lower costs Once a small restaurant builds a reputation, chef Manish Mehrotra says, it becomes almost incidental to how it earns. “With that name, you get a lot of opportunities to earn money,” think pop-ups, private dinners charged at a premium, collaboration with a car company, a finance company or a credit card.
For decades, restaurant economics relied on one equation: more seats plus faster table turnaround equals higher output. The shift changes what every seat is expected to do. ” Papa’s follows a similar model. Sometimes the restaurant itself becomes the showcase, rather than the primary source of income.
“Earlier, the assumption was that viability came from volume. Today there is also room for restaurants that create value through a highly differentiated experience.
