This insightful conversation with Balasubramanian A, VP & Business Head of TeamLease Services Ltd., explores the key compliance hurdles, potential consequences, and effective strategies to ensure long-term sustainability in the QSR sector.
To begin, it sounds like the QSR sector is facing a lot of pressure, more so after the pandemic. Can you explain how this is affecting compliance, especially for smaller players?
I think we need to really start from the top here. It’s not compliance is not so much the problem itself as much as it is an outcome of larger problems. The core issue is a result of larger challenges, particularly around profitability. Over the last couple of years, many QSRs have struggled to make money, and the market has become increasingly competitive. On one end, we have smaller players who can undercut even big brands by offering lower prices for the same products. On the other hand, there’s also a trend toward premiumization, where a segment of the population is seeking more upscale experiences, putting even more pressure on traditional QSRs.
So, do you think smaller businesses in this space are particularly challenged when it comes to balancing cost with compliance?
Yes, and it’s not just the smaller players facing profitability issues—larger chains are struggling too. Compliance becomes an afterthought when profitability is such a concern. For smaller businesses, it’s especially tough because they often can’t afford the overhead of compliance. This is compounded by the fact that their workforce is typically young, and these employees aren’t looking for a career in QSRs. They work for experience, exposure, and a little extra cash.
You mentioned that the workforce in these QSRs is mainly young, with many workers just looking for short-term gigs. Can you elaborate on how that impacts operations and compliance?
It’s a big challenge. Most workers in QSRs are in their early 20s, college students who only work in the evenings and weekends. The reality is, many of them don’t see themselves building a career in the industry. This mindset impacts the operations at these chains. Many don’t think about long-term things like workflow, supply chain, or leadership pipelines. For them, it’s all about the short-term.
For example, some chains only give one weekly off and don’t offer earned leave beyond that. Some workers are treated like gig workers—they don’t have the same benefits or job security as someone in a more traditional role.
Many franchisees don’t even pay PF correctly or at all, which creates further problems. What’s worse is that many workers aren’t even aware of the benefits of having a PF account. For them, it’s all about how much money they take home today, so they don’t push back on these issues. The lack of awareness both among employees and employers compounds the problem, and it ends up reinforcing the perception of QSR work as nothing more than a gig.
Do you think there’s a way for QSRs to balance compliance and costs effectively, especially for smaller players?
It’s definitely a tough balance. The key is finding ways to streamline costs while still adhering to basic regulations. For many of these smaller businesses, compliance needs to be something they integrate into their model without feeling like it’s something too unattainable. Maybe technology solutions or outsourced compliance services could help ease the burden, but at the end of the day, it’s about raising awareness—both for the employers and their employees—so they understand the long-term benefits of being compliant.
In light of these challenges, how can QSR employers balance competitive pay, work-life balance, and compliance with regulations to run a successful business?
Given the thin margins, it’s understandable that paying higher wages is challenging for QSRs. But there’s definitely room to invest in processes, technology, and automation to boost productivity. By improving efficiency, either fewer people can do the same work, or the current workforce can manage more, which would free up resources to increase wages.
Attrition is also a huge hidden cost. Some chains are facing turnover rates above 60-70% annually, which means they’re constantly rehiring and retraining. This creates productivity gaps, not to mention the cost of lost experience and skill. Addressing this could start with a stronger focus on attracting people who see QSR work as a career, not just a quick job. Offering a clear career path, ongoing training, and skill development would signal a commitment to employees and help reduce churn.
Plus, strategically managing the workforce makes a difference. Core, trained staff could handle day-to-day operations, with gig or part-time workers filling in for busy periods like weekends. This approach keeps a reliable base of employees while allowing for flexibility as needed. For franchisees with hundreds or thousands of employees, these measures ensure the basics are covered.
And government support could play a vital role here too. The new schemes announced could ease some of the cost burden. Scheme A, for instance, covers up to Rs. 15,000 toward the first month’s salary of new hires. Scheme C subsidizes provident fund costs when companies expand their workforce—directly helping with labor costs.
Altogether, these measures could help QSRs stabilize their workforce, enhance productivity, and gradually create more room in the budget for competitive wages.
So basically the government has launched interventions to make sure that the sector thrives in consideration of every aspect involved.
Yeah. Or rather, the government has anyway launched these initiatives across all industries and it’s up to QSR industry to make the most of this opportunity. So I don’t really know how much they are looking at these new schemes as a positive force multiplier for themselves. But if they are not, then they should.
What do you see as the biggest challenge for businesses when it comes to labor law compliance, especially in QSRs?
Without a doubt, the most significant challenge is PF—Provident Fund. It’s the single most expensive compliance when it comes to employees. Think about it: PF contributions can go up to 25% of an employee’s salary. That’s a huge chunk which directly impacts the overall CTC and, honestly, takes a big bite out of what employees take home.
The government has recognized this challenge and has been trying to provide relief for years. For example, there was the PMRPY (Pradhan Mantri Rojgar Protsahan Yojana) scheme and later the Atma Nirbhar Bharat initiative, both of which aimed to ease the burden. Even in the latest budget, there were some measures to subsidize PF contributions. It’s clear that the government is trying to make this easier for businesses.
But here’s the thing—these schemes only work if businesses adapt and implement them properly. For QSRs, especially, tapping into these benefits can really make a difference. It’s all about understanding what’s out there and using it to its full potential.
With the rapid growth of the sector driven by technology and AI, what emerging trends or fads do you foresee shaping the QSR industry in the next 5 to 10 years?
Five years is too far in the future to make claims, but we’re already seeing some big shifts in QSRs in India today. Major brands have shut down call centers and are now using AI-driven bots to handle customer service. This change has already led to significant cost savings. The beauty of AI is that it’s highly scalable—once set up, it can handle increasing volumes without much additional cost. So, for tasks like call center operations, ticketing, and back-office admin work, automation has already started to replace routine roles.
The first impact of this shift has been on people in routine jobs, who face the most immediate risk of being automated out. Many companies have already moved to chat-based support instead of traditional call centers.
Looking forward, if technology can be applied to food preparation itself, it could boost productivity within outlets. Higher productivity could create room for better pay—one of the ideal outcomes. At its core, technology’s role here is to enhance productivity and scalability. For QSRs, this could mean combining new tech with supportive government schemes to reduce costs, improve compliance, and ideally, raise wages over time. It’s an exciting potential for a more efficient, sustainable, and fair industry.
Are there any trends or practices from the Western QSR sector that you think Indian businesses could adopt to enhance their operations or customer experience?
QSR expansion really varies across different markets because, globally, each major chain partners with multiple franchisees, each doing things a bit differently. Even within a single country, one brand might work with various franchisees, each with its own approach. The brand sets some basic standards, but beyond that, franchisees handle their teams in their own way.
It’s a true partnership, so there’s no universal playbook you can just copy-paste from one franchise to another. Every franchise has its own cost structure and unique business needs, so they have to tailor their approach. In the end, each market has to really understand its audience and figure out what will work best for them.
As an industry leader, are there any specific tools or technologies you would recommend that businesses incorporate into their operations to improve efficiency and overall performance?
There are two key ways to approach this. First, businesses can partner with a workforce outsourcing company like TeamLease. When they outsource their workforce management to us, we handle everything—managing the staff and ensuring all compliance requirements are met. This is especially helpful for franchisees or local business owners who may not be fully aware of regulations, as it reduces their risk and ensures compliance is handled by experts.
You see, it’s not just about intent—sometimes even franchisees, who are often local business owners, might not be fully aware of compliance requirements. It’s not always deliberate non-compliance; they simply don’t know what needs to be done. Honestly, even I didn’t know about many labor laws until I got deeply involved in this space. So I wouldn’t blame them for not being aware, but once you’re in business, you have a responsibility to stay on top of things. If you can’t do it yourself, then you should bring in experts to handle it for you.
Now, if they prefer to manage their workforce in-house and not outsource, we have another solution—a SaaS-based compliance and regulatory technology platform called TeamLease RegTech. This platform isn’t just limited to labor law compliance; it covers a wide range of regulatory requirements. It’s an end-to-end tool that helps businesses stay compliant with the laws of the land. And because it’s a SaaS platform, it operates in real-time. So, whether it’s through outsourcing or leveraging technology, these are two effective ways businesses can stay compliant while focusing on their growth.
You mentioned that many QSR owners lack awareness of basic compliance due to their focus on profits and ROI. What steps do you think can be taken to bridge this awareness gap in the sector?
I really think it comes down to awareness—both within the industry and from others. It’s about shifting the view so that employee benefits aren’t just seen as costs but as genuine investments in people’s well-being.
Take something simple: like offering unlimited health coverage for employees and up to seven family members. A lot of people don’t even know that this kind of benefit is possible. Maybe even you didn’t. But just sharing that in one clear sentence can catch people’s attention and make them curious to learn more about what’s available to them.
If we could share these kinds of benefits in simple, easy-to-grasp ways, it would go a long way. Small, clear messages can really help people understand what they should be offering and what they could be getting. And that awareness could make a real difference across the whole industry.
Do you have any closing remarks or advice for aspiring QSR leaders or individuals already working in the industry?
In any service business, people really are the heart and soul of what we do. Unlike in a product-based business, where success might not hinge as much on human touch, service businesses thrive on it. With fewer ways to stand out, the quality of service—and the quality of the people behind it—becomes a true competitive edge. Instead of viewing employees or locations as just expenses or liabilities, we should see them as assets worth investing in.
The first step in truly investing in people is providing them with security, starting with compliance and ensuring they have adequate social protections. That’s the foundation. Beyond that, it’s about giving them a clear career path, hiring thoughtfully, offering the right training, and putting systems in place to help them grow and work more effectively. When we shift our perspective to see people as an essential part of our strength, it changes the entire dynamic.
This shift in mindset—seeing employees as valuable assets rather than costs—can make a profound difference. Companies that prioritize social security and support for their teams see loyalty, reduced turnover, and stronger bonds. People feel more connected, more motivated to stay, and less likely to leave, which can be a huge force multiplier. Instead of constantly hiring, firing, and retraining, we’re building a more stable, dedicated team that drives better service and long-term success.
