Carl's Jr eyes land of Oz
Fast-food franchise operator Restaurant Brands has on its radar taking the Carl's Jr burger brand to Australia.
The listed company has already said the American burger chain could become a bigger seller in New Zealand than KFC, which currently contributes the most to its bottom line.
Chief executive Russel Creedy said the Australian and New Zealand fast-food markets were similar.
"We've learnt how to do it here and that could be transferred across," he said. "It's something we'll discuss in future."
Creedy said California-based CKE Inc, which owns the Carl's Jr chain, had indicated it would look favourably on Restaurant Brands taking up the Australian rights but first the company had to bed down profitable growth in New Zealand.
The company had an unsuccessful foray into Australian with Pizza Hutt, which Creedy said he vividly recalled because he had to close the rump of the chain's Victorian stores when he joined some years ago.
The key difference this time around would be setting up a chain on sites it chose rather than acquiring a business with locations that were struggling, he said.
"There have been a number of overseas franchise operators who have come into New Zealand and Australia and thought they could transfer their brands into these markets and there have been a number of failures and some sad cases that didn't work.
You have to get your labour needs and productivity right and understand your supply chain where localisation is an issue. With Carl's Jr we can localise everything and that takes risk out."
The first Carl's Jr store in New Zealand was opened two years ago by former All Black Michael Jones and his brother-in-law Barry Forsgren, who had been operating the brand in American Samoa since 2007.
They currently own two Auckland stores.
Restaurant Brands then entered the picture and now has shared rights in Auckland and sole rights for the rest of New Zealand. The brand still contributes only a small slice of the company's overall pie, which includes KFC, Pizza Hutt and Starbucks. Carl's Jr accounted for just $6.6m of the listed company's total half-year sales of $176m but was a big driver of the 5.4 per cent revenue growth during that period.
Its Hastings store set a world record for the chain by making $185,000 in sales in its first week of opening.
"We think it could be around a $200m [revenue] brand in the stable within five to six years," Creedy said.
Restaurant Brands operates eight Carl's Jr stores so far, plans to build another six to seven a year, and eventually wants to reach 60 stores nationwide.
Creedy said one of the problems hindering the chain's growth at the moment was difficulty in finding suitable sites, particularly in Auckland, Wellington and Christchurch.
During the global financial crisis it became easier to secure empty sites but developers were now finding they could get better returns for alternative land uses. There are four Carl's Jr stores under construction and the company has another four sites on the short list which can take up to a year to secure, Creedy said.
The company is also considering two other new brands - one Mexican and the other Asian fusion.
Yum Brands, which owns KFC and Pizza Hutt, also has the Taco Bell fast food-brand, which Restaurant Brands recently mooted bringing here.
Creedy said Taco Bell was still under consideration but it was more likely it would opt for a healthy Baja-style brand. Mexican fast-food brands in the US that are expanding offshore include Baja Fresh, California Tortilla and Chipotle Mexican Grill, with the latter also recently opening stores for its new Asian fusion brand, the ShopHouse concept.
CKE Inc, which also runs brands such as Green Burrito and Red Burrito, was sold last week by its private equity owner to another private equity firm, Roark Capital. CKE began as a Los Angeles hot dog stand in the 1940s by entrepreneur Carl Karcher and has raised controversy more recently for its steamy burger ads featuring celebrities such as Paris Hilton and Kim Kardashian.
Source: Stuff.co.nz, 24 November 2013
