Business

Saturday April 18, 2009

Kenny Rogers franchise holder looking for strong partners

By LEE KIAN SEONG


ROASTERS Asia Pacific, the international operator of casual dining restaurant chain Kenny Rogers Roasters, plans to expand its footprint in Asia in the next two years through its franchising business model.

Executive director Datuk Francis Lee says the company, a wholly-owned subsidiary of Berjaya Corp Bhd, is looking at southern China, Hong Kong, Macau, India, Mongolia and the Middle East where it is currently talking to local parties.

“It takes time to choose the right partners as we want strong partners that can be committed and help us grow the brand,” he tells StarBizWeek in an interview.

He says the company expects to close half of the deals in two years and sign the development agreement.

Kenny Rogers has expanded its business into countries like Singapore, China, Dubai, Australia, the US and the Philippines. It has over 230 outlets globally, which is mostly run on the franchising model.

Roasters Asia Pacific bought over the master franchise for Kenny Rogers from the US-based Nathan’s Famous Inc in April last year.

Berjaya Roasters (M) Sdn Bhd (BRoasters) is the franchise holder of Kenny Rogers in Malaysia, where it operates 60 restaurants.

Lee, who is also executive director of BRoasters, says the company plans to open six to eight new outlets in the financial year ending April 30, 2010 (FY10).

“The investment cost per outlet is RM550,000 to RM700,000,” he says, adding that the company owns 42 restaurants while 18 are franchised.

In FY09, it opened 12 new outlets.

On revenue performance, Lee says the company expects 20% to 22% sales growth in FY09 and 8% in FY10.

“The growth in FY09 will be driven by our existing and new outlets while the slower outlet expansion in FY10 will translate into a lower growth,” he says.

Kenny Rogers registered a total revenue of RM42.4mil in FY08.

According to OSK Research, Kenny Rogers holds a 4% share in the local fast food industry.

Lee says BRoasters allocates 4% of its total sales for advertising and promotion annually and plans to maintain this figure despite the economic crisis.

On its delivery business, Lee says the company is putting more emphasis on the service which was started last February,

“We are currently working with some outsourcing call centres to provide this service,” he says.

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