WINGING IT
As growing numbers of consumers seek healthier options in convenience foods, chicken-based fast-food outlets need to ensure they maintain their place in the pecking order.
A fast food favourite, chicken is delivering to Aussie consumers.
Australians love chicken and a good burger, but with a rising awareness of healthy eating, takeaway shops need to innovate if the fast-food chicken industry is to maintain its modest growth of the past five years.
By Gali Blacher
Analyst Samuel Johnson in the IBISWorld report Takeaway Chicken Shops in
Australia says that while consumers love a chicken treat, they are enjoying healthier alternatives.
Strengthening competition among fast-food companies has constrained industry expansion, says the report. Despite this, the demand for convenience food has grown, with consumers not having time to cook at home.
Industry revenue is forecast to grow at an annualised 1.7 per cent over the five years through 2022-23 to reach $3.9 billion. Meanwhile, growing health consciousness is likely to turn consumers away from high-fat chicken products toward healthier options.
Over the next five years, larger fast-food brands are expected to respond to changing consumer tastes. IBISWorld analyst Bao Vuong says takeaway chicken chains will look to improve their image by offering
healthier options and focusing on grilled rather than fried chicken. They may also offer more salads.
However, in the face of consumer perceptions that fast-food chicken is not healthy, major player KFC is likely to run into difficulties with its image and could struggle as consumers seek options considered more healthy.
Vuong also says an expected rise in discretionary income will support industry growth. Although higher discretionary income can lead some consumers to spend on more expensive restaurants, it also encourages households that cook most meals at home to visit inexpensive outlets like takeaway chicken shops. The demand for fast food is also projected to stay strong because of its affordability and convenience.
Rising awareness of dietary health and nutrition has weakened demand for products with high fat and salt content, says the report. In response to this, industry players have expanded their product range to incorporate healthier alternatives. New menu options and the expansion of major store networks have helped drive industry revenue growth.
Chicken franchises in Australia are expanding their networks rapidly, and there is plenty of opportunity for potential franchisees wanting to take a bite into a chicken franchise. Here are some of the leading contenders:
the chicken franchise grow to more than 1100 outlets in South Korea alone. The chain made its debut in Australia in 2015 and has expanded to 12 outlets nationally with two under development. The brand chose to franchise as it wants to share the “classic taste of Korea” with as many Australians as possible.
“Franchising allows us to create a formula for growth that we can share with all our franchise owners that gives them the opportunity to make dreams come true,” says NeNe Chicken marketing and international liaison manager Yealim Kim.
“We believe the key difference we bring to the game is our genuine desire for all our franchisees to feel like they are a part of the NeNe family. We are all in it together, meaning we can focus on our customer enjoying the NeNe experience while also making sure our franchisees are successful.
“Importantly, our marinade, batter mix and sauce coatings are all imported directly from NeNe Chicken Korea. This creates a brand authenticity and an edge over our competitors.”
Above all else, the brand values trust and honesty with all franchisees. “We make sure they are aware of everything that is happening in the business, and they keep us in the loop of everything happening locally,” says Kim. “This is why we think we stand out to potential franchisees. It’s those little extra elements of trust, given both ways, that make a difference.
“For example, the outlet lease is held by franchisees so they have the assurance the business really belongs to them, something that many of our competitors won't do. We also negotiate with our suppliers to reduce prices. As we have more franchisees joining our network, our bargaining power increases and supplier prices drop.”
He also says the franchise works hard to create a p rofitable and sustainable business model for franchisees, ensuring the model allows for a consistent return on their investment.
NeNe’s chicken combines “bold” seasoning, farm-fresh chicken and a variety of sauces imported from Korea. “We also say the crispy batter makes it better,” says Kim. “Our secret formula reduces oil absorption, which keeps the chicken juicy and moist on the inside but crispy on the outside – just how our customers want it.”
The franchise provides a grand opening marketing plan to make sure franchisees impress their target demographic, and also provides ongoing and continuous marketing support. “We use a multipronged marketing strategy that involves a b lend of traditional and social-media advertising to keep our brand exciting and relevant to our target audience,” says Kim.
NeNe’s system has a blend of company-owned and franchisee-owned outlets – f ive in Victoria and Western Australia, one in Brisbane and one in Sydney. The company will also have openings in Glen Waverley, Victoria, and Darwin this year.
OPORTO
Oporto’s story starts in 1976 when, at the age of 18, Antonio Cerqueria migrated to Australia from Portugal. Ten years later, knowing that no-one was serving flame-grilled chicken as was common in Portugal, he decided to open a c hicken shop in Sydney’s North Bondi serving the peri peri style of chicken with the now famous chili sauce. The philosophy was quite simple: to provide unique, simple and delicious food to friends.
Cerqueria built a l oyal following, and in 1995 the first Oporto franchise opened in Balmain. By 2003 there were 50 stores, and in 2005 Oporto was named by BRW as Australia’s fastest-growing food franchise. By 2007, Oporto had 98 stores across Australia and New Zealand.
Robust technology, systems and tools support franchisees in their day-to-day business, as well as a dedicated support team. The founder’s strict insistence on high s tandards of freshness and quality has helped give Oporto’s “fresh-not-frozen, grillednot-fried” chicken and burgers a p oint of difference, and his involvement continues even though the business has become part of the Craveable Brands portfolio.
As well as continuing its Australian expansion, the brand is going international too.
“Taking our brand internationally has always been a key focus,” says Oporto CEO Craig Tozer. “Having found the right master franchise and supply partners, we are excited to announce that Oporto will be expanding into A sia, with the f irst restaurant about to open in Singapore.”
He says the brand has spent many months in the market doing qualitative and quantitative research, “and the company’s local expertise gives us confidence". Oporto has partnered with global f inancial ser vices business Aura Group in Singapore with the goal of opening three outlets this year and 10 over the next five years. Aura Group works across Singapore, Sydney, Melbourne, Bangkok and Hanoi with a focus on corporate advisory as well as funds and wealth management.
Tozer says the group also has extensive hospitality experience and has investors who own supply businesses in A sia. “This gives us an understanding of the local challenges and inherent risks of working in a n ew countr y,” he s ays.
RED ROOSTER
Red Rooster founder Peter Kallis’ father and grandfather migrated to Australia from the G reek island of Kastellorizo in the early 1900s. They lived a s imple and tough life in Perth focusing on the f amily business, a f ish and chips shop. This was the start of the K ailis f amily empire.
When t wo acquaintances from Adelaide came seeking investment to help expand their chicken business, Kailis spotted a b usiness opportunity. This led to Red Rooster launching in 1972, with the f irst restaurant being built in Kelmscott, WA.
Soon there were four Red Rooster restaurants – w ithout any advertising, just word of mouth. Kailis sold the company to Coles Myer in 1992, when the network had grown to 8 0 outlets. He continued to work with Red Rooster, guiding the brand for about another five years. Since 2007 the brand (along with Chicken Treat and Oporto) has been owned by private equity. L ast year the holding company Quick Service Restaurant Holdings was re-named craveable brands.
Franchisees are regarded as incredibly important to the company’s success, and for franchisees, passion is vital, s ays Craveable Brands.
“Franchisees need passion for the brand and passion to succeed. Mix passion and customer-centricity with understanding business insights, a commitment to succeed and dose of hard work, and you have a f uture franchisee star in the making,” says Sean O’Connor, craveable brands, general manager franchising.
“Through our ongoing training programs we can help franchisees improve all other business aspects, but we can’t teach them passion or people skills.”
With the food industry constantly changing, Red Rooster believes it is vital the business continuously evolves. “Through our technology advancements, as well as our food innovations and store designs, we ensure we stay relevant to our customers,” says O’Connor.
Red Rooster has robust plans which it s ays it shares with potential franchisees. “This combination of historical results and upcoming plans allows us to bring in a go od flow of c andidates,” says O’Connor.
As Red Rooster plans expansion across drive-through and shop-front restaurants mainly in New South Wales and V ictoria, it is seeking franchise candidates with a p roven track record in business and people skills.