Australian Fast Foods Pty Ltd will move to franchise company owned regional Chicken Treat stores in an effort to ensure better staff retention rates.
Australian Fast Foods Pty Ltd will move to franchise company owned regional Chicken Treat stores in an effort to ensure better staff retention rates.
The company is also pushing ahead with a national growth strategy, which has been reinvigorated since a private equity takeover last month.
AFF’s 12 wholly-owned regional Chicken Treat stores – including Port Hedland, Newman and Karratha – will be franchised, bringing the company’s regional franchised outlets to 20.
AFF managing director Frank Romano said the company needed to secure its long-term market share in country towns, as well as combating a high staff turnover rate and the expense of flying in regional managers.
“We feel that franchising might eliminate some of the pressure we have on the placement of people in those areas,” Mr Romano said.
While the sale of the Chicken Treat stores is expected to reduce costs, the company’s future growth will come from the eastern seaboard, where 40 stores are planned for next financial year, mainly in New South Wales and Victoria.
In order to spearhead its expansion, AFF has appointed a new franchising and property general manager, based in Brisbane.
The company also appointed a new franchising national manager two weeks ago, recruited from a fast food company in the US.
Mr Romano said AFF’s strategy had always included a plan to grow to 600 stores, but it had not previously had the capacity to do so.
He said the new private equity arrangement, whereby Sydney-based fund Quadrant Private Equity bought out AFF major shareholder, Nick Tana, in a $180 million deal, had provided the financial backing to expand both brands.
“We’ve got people and we’ve got money, we just need the opportunities to put in the stores over two or three years’ time,” he said.
The takeover secured Quadrant a 75 per cent stake in AFF, while Mr Romano retains a 15 per cent stake.
Mr Romano said Red Rooster was one of the least represented fast food chicken brands in New South Wales, and was ranked third in Victoria, providing an opportunity for significant growth.
“When we acquired the chain from Coles Myer, there had been no growth for 10 years,” he said. “In the five years we’ve owned the company, we will have put up 90 stores.”
AFF is also pursuing greenfield sites in WA for both the Chicken Treat and Red Rooster brands, in metropolitan and country areas.
The company opened two new Chicken Treat stores in Perth recently and is currently advertising for a franchisee for a new Red Rooster store in Broome, while planning four new Red Rooster stores for next financial year.
“The brand hasn’t had a lot of growth over the last couple of years, and we’re keen to change that,” Mr Romano said.
He said the group’s strategy of establishing Chicken Treat stores in second-tier and regional shopping centres, while maintaining a presence in the drive-thru market with Red Rooster, would be replicated in the eastern states.
AFF currently has 458 Chicken Treat and Red Rooster stores nationally, with plans to establish an additional 150 stores.
