Wow! Momo plans to shut about 25-30 outlets across markets by September as operating the restaurants will not be viable even after the lockdown is lifted completely, CEO & founder Sagar Daryani told FE.

The company has been able to recover only one-third of its business so far and the localised lockdowns have hindered full operations. About 210 of its 345 outlets are currently functional.

The launch of Wow! Momo Essentials and the partnership with Cafe Coffee Day (CCD) have helped salvage the business to an extent — sales inched up to Rs 5.5 crore in June from Rs 2 crore in April and July is “getting better”, but these measures solely are unlikely to rebuild the business. Sales stood at about Rs 16 crore in February.

Going ahead, the strategy will be to focus on deliveries and takeaways, Daryani said. Wow! Momo has already opened five mini outlets across three cities measuring up to 300 sq ft to service delivery and takeaway orders. The outlets also have limited dine-in seats.

“We are very clear about the fact that delivery will contribute up to 70% to our revenues going forward from about 25% at present. Takeaways will form another 20% and the remainder will come from dine-in,” Daryani said.

The dine-in business has been severely impacted, especially in the malls which have managed to reach only 10% of pre-Covid business. “Normalcy can be expected only around December. Takeaways are doing good in Mumbai and the high-street stores in Kolkata and Bengaluru have seen a decent number of customers step in,” Daryani said.

Expansion will be centred around the delivery and takeaway model and more such mini stores will be set up. The focus markets will be Chennai, Hyderabad, Kolkata, Bengaluru and Delhi-NCR. “It is all about re-engineering the business and getting the format correct. We will also open cloud kitchens that will cater to both Wow! Momo and Wow! China,” Daryani said.

Wow! Momo aims to broaden its partnership with CCD and plans to open 200 such outlets in the next two years. Under the arrangement, the QSR (quick service restaurant) chain sets up kiosks in CCD outlets and serves its products in all three formats (dine-in, delivery and takeaway). Daryani said the target is to generate anywhere around Rs 3-4 lakh in revenues from each outlet.

The company will also foray into the FMCG space in September with the launch of frozen momos, Daryani added.