From coffee to doughnuts now chicken, and soon burgers and ice cream
Jul 15, 2015
AFTER MAKING a deal with Daddy Dough last year, energy giant PTT is aggressively expanding its food and beverage business to include chicken restaurants, and early next year will expand into hamburgers and ice-cream businesses.
Buranin Ratanasombat, PTT vice president for retail marketing, held a press conference yesterday to announce an exclusive master franchise agreement with Texas Chicken, one of the largest quick-service chicken restaurant chains in the world, to operate its restaurants in Thailand for 10 years. He said the company had earmarked a Bt1.5-billion budget to establish 70 Texas Chicken outlets in the country over the next five to 10 years.
PTT has decided that the fried-chicken business has good potential, since chicken chains currently account for 40 per cent of the quick-service-restaurant market in Thailand, valued at Bt30 billion. Furthermore, Texas Chicken is a leading US brand that has established branches in more than 20 other countries, including in Southeast Asian, where it is expanding rapidly.
“Because of our success in Cafe Amazon, we regard this cooperation as a win-win for both parties. Previously, our goal was to have 70 Texas Chicken restaurants in 10 years, but if there is a good feedback I believe we can make it in five years,” Buranin said.
Texas Chicken will have to compete with established operators including KFC, which currently commands more than half of the local quick-service chicken-restaurant market, worth Bt17 billion in yearly sales. Less than two months ago, Yum Restaurants International (Thailand), the operator of KFC here, announced it was seeking a new business partner to help it expanding its KFC branches from 532 to 800 by 2020, in addition to Central Restaurants Group, which is currently its sole local franchisee.
Sarun Rungkasiri, PTT’s chief operating officer for the downstream petroleum business group, said the energy company was looking to get into other food products such as hamburgers and ice cream. It is expected to announce new deals with international franchise owners early next year.
He said PTT’s main objective is to offer a complete range of services to its customers, rather than to become a big player in the quick-service-restaurant market.
The first two Texas Chicken restaurants will be opened at a couple of shopping malls by the end of this year. There will be two formats, 300 square metres for shopping malls and 150sqm for smaller outlets including those at PTT stations.
Sarun said its coffee franchise, Cafe Amazon, which started operating at PTT fuel stations, now has 200 outlets in other locations, on top of about 1,000 branches at PTT stations.”Every unit has provided a good return to its operators,” he said.
Buranin said non-fuel businesses currently contributed 20 per cent of PTT’s total downstream revenues, and 40-50 per cent of its profits. The non-fuel contribution is expected to rise to at least 30 per cent within five years.
The company plans to offer Texas Chicken franchises to the operators of its petrol stations in the future. Investment for each restaurant will average Bt15 million to Bt20 million.
Zack Kollias, executive vice president for international operations of Texas Chicken, said the company was confident of growing its business in Thailand because there is a large market for chicken here and it has PTT as a great partner.
“We’re the third-largest quick-service chicken restaurant in the world. KFC is the largest QSR operator in the world with the biggest market share in most countries. We’re a growing brand. We will open 20 new outlets in Asia-Pacific this year,” he said.
Amarpal Sandhu, senior franchise director for Asia-Pacific, said about 30 per cent of Texas Chicken’s menu at its Thai restaurants would be adapted to meet local tastes, such as being less salty than in non-Asia-Pacific markets.
Texas Chicken is the offshore brand of Church’s Chicken, founded in the US in 1952. Together the two brands make up one of the largest QSR chains in the world. They have more than 1,650 locations in 23 countries and system-wide sales of more than US$1 billion (Bt34 billion).
There are currently 125 outlets in Southeast Asia, including Singapore, Vietnam and Malaysia, and the brand has just launched in New Zealand.