Kenny Rogers ROASTERS Evaluation
Thursday 12 June 2014
Thursday 2 August 2012
Kenny Rogers ROASTERS
Kenny Rogers Roasters is a chicken restaurant that
was founded by country musician Kenny Rogers and former Kentucky governor John
Y. Brown, Jr., who had also owned Kentucky Fried Chicken from 1964 to 1971. The
menu was originally centered on wood-fired rotisserie chicken. After closing
almost all of its U.S. operations, Kenny Rogers Roasters now operates primarily
in Asia.
History
In 1991, Country singer/songwriter Kenny Rogers
ventured into the fast-food business and co-founded Kenny Rogers Roasters with
former KFC owner John Y. Brown, Jr. By 1995, the menu had expanded to include
turkey, ribs, and various side dishes, and the chain had grown to over 350
restaurants, including locations in Canada, the Middle East, and Asia. The
establishment became so well known an entire episode of Seinfeld ("The
Chicken Roaster") was dedicated to Kramer's love of Kenny Rogers Roasters
chicken which started after he and Jerry Seinfeld switched apartments due to a
bright red neon light shining through Kramer's window so he couldn't sleep.
The company entered Chapter 11 bankruptcy in March
1998 and was bought by Nathan's Famous, Inc. for US$1.25 million (US$2 million
in more recent terms) on 1 April 1999; as a result of restructuring, many
locations closed. By 2000, the chain was down to 90 franchised restaurants, 40
of those in the United States.
Nathan's Famous divested itself of the chain in
2008, selling it to their Asian franchiser, which is owned by Berjaya Group of
Malaysia. At the time, there was only one Kenny Rogers Roasters still operating
in the United States, located in the Ontario Mills mall in Ontario, California.
(The Ontario Mills location closed on December 31, 2011.) The 2008 purchase agreement
allowed for the continued operation of this location, and allows Nathan's
Famous and Miami Subs to continue selling Kenny Rogers Roasters items in their
restaurants. Nathan's continues to serve Kenny Rogers Roasters items in select
locations, such as its flagship location on Coney Island, and Miami Subs (since
sold off by Nathan's) also has a "Kenny Rogers" section on their
menu. Despite the chain's steep decline in the United States, Kenny Rogers
Roasters continues to flourish in Asia, particularly in Malaysia. and the
Philippines. Some branches in the Philippines also serve Seattle's Best Coffee
products.
Brand
Story
From a very young age, I've had a passion for food.
I was fascinated by the love and liveliness great food brought to a family.
Young or old, rich or poor, there was nothing more important than having a
great meal. And that's what I'm passionate about - great food for everybody.
As a musician, I had the opportunity to travel the
world. Wherever my music brought me, great food was never far behind. I was
always in search of food with personality. Food with heart and soul.
From my travels, I learnt that food should be
simple. When you have too many choices, you lose sight of the things that
really matter like quality ingredients and passion in cooking. There should be
a joyous, no-nonsense way to cook and serve simple yet delicious meals. Food
made with love brings people together. It'll put a smile on your face and a
twinkle in your eyes.
At Kenny Rogers ROASTERS, you'll get nothing less
than a great meal. Because we're putting love back into food.
By: Kenny Rogers
Berjaya
Corp Bhd (BCorp) Master Franchise Malaysia
Kenny Rogers ROASTERS was awarded three times in a
row (1996, 1997, 1998) for the prestigious America's Choice Award Winner for
the Best Chicken Chain by Restaurants and Institutions Magazine, a leading
publication from USA. Kenny Rogers ROASTERS was also awarded the Master
Franchisee of the Year 2000/2001and 2002/2003 by the Malaysian Franchise
Association, an affiliate of the World Franchise Council.
Berjaya Roasters (M) Sdn. Bhd. is the franchise
holder for Kenny Rogers ROASTERS ("KRR") in Malaysia. The company is
a wholly owned subsidiary of Berjaya Group Berhad and was incorporated in 1994.
In April 2008, Berjaya Corp Bhd (BCorp) wholly owned
subsidiary of ROASTERS Asia Pacific and master franchise for Kenny Rogers
ROASTERS fully acquired the chain's parent, US-based Nathan's Famous Inc.
Kenny Rogers ROASTERS is a mid-casual dining
restaurant with roast chicken as its main core item complemented by a rich
variety of hot and cold side dishes. This is made up of Kenny's famous
home-made muffins, jacket potatoes, vegetable salads, pasta, soups, desserts
and beverages served in a friendly and comfortable environment.
Three Main Service
A great muffin starts with three basic ingredients:
flour, eggs and water. When you top it off with flavours like banana raisin,
chocolate raisin or vanilla, you end up with something special - the famous
Kenny's Home-made muffins.
Made fresh everyday, our muffins are delicious to
the last bite. Now that's a perfect start to a great meal.
At Kenny Rogers ROASTERS, you'll get nothing less
than a great meal. Because we're putting love back into food.
At Kenny Rogers ROASTERS, we guarantee you'll be
spoilt for choice. Whether you're craving for comfort food or you're watching
your waistline, you'll definitely find something that'll whet your appetite.
From the rich macaroni and cheese to the healthy
fresh fruit salad, mash potatoes to coleslaw, all our side dishes go perfectly
with our famous roast chicken. So what are you going to have with your chicken?
At Kenny Rogers ROASTERS, you'll get nothing less
than a great meal. Because we're putting love back into food.
Whether it's meat, fish or vegetables, roasting
brings a sense of charm to the table. It's the best way to cook a whole chicken
and don't let anybody tell you differently. The bones give the meat amazing
flavour while keeping it moist during cooking. Roasting definitely takes more
time. Roasting definitely requires more care and attention. That's what love
for food is about.
At the heart of every great roast chicken is a great
marinade. At Kenny Rogers ROASTERS, the secret to our great taste is our
signature blend of lemon, ginger, sage and oregano (the rest of the ingredients
are of course, a secret). Together, they seal the meat with amazing flavour
while keeping it succulent and tender.
At Kenny Rogers ROASTERS, you'll get nothing less
than a great meal. Because we're putting love back into food.
Previous Activities
Corporate
Social Responsibility ("CSR") KRR reaching out and giving back to the
communities
As a brand that advocates healthy living through its
'less fat...less salt...less calories' tagline, KRR is committed to its mission
in promoting and encouraging healthy living among Malaysians while not
forgetting the less fortunate in the communities within which it operates.
Since its inception in 2005, the KRR Community Chest
Campaign continued to give back to society through various CSR initiatives such
as the annual Roasters Chicken Run and Wishing Tree Campaign, as well as the
frequent festive gatherings for the underprivileged, food donations and staff
visits to children's and old folk's homes.
During the financial year under review, the Roasters
Chicken Run event raised RM65,000 for the National Kidney Foundation of
Malaysia, a provider of dialysis treatment and a one-stop centre for kidney
patients. To date, this unique charity run event has raised more than RM310,000
for various non-governmental and charitable organizations such as Tabung
Kebajikan Pesakit HUKM, Pediatric Unit HUKM (Oncology), Unit TUTUR - Aural
Rehabilitation Centre for Hearing Impaired Children together with Yayasan Budi Penyayang
Malaysia and House of Joy and Faith, Yayasan Sunbeams Home, Rumah Juara, Rumah
Kanak-kanak Tengku Budriah, Rumah Sayangan, Rumah Hope, Rumah Kebajikan Anbu
Illam, Rumah Charis, Ti-Ratana Welfare Society, and Tabung Kebajikan Pesakit
PPUKM - Young Diabetic Patients.
The Wishing Tree campaign which granted the simple
wishes of underprivileged children saw another successful year by making the
wishes come true for more than 1,200 children from 30 charitable homes
nationwide.
As part of our on-going commitment to healthy
living, KRR also organized the Public Health Talk 2010 conducted by
professional healthcare consultants aiming to educate the public on how diet
preference could affect the quality of life.
In the area of education, the Roasters Scholarship
Programme was introduced in March 2010 to provide financial assistance to needy
students to pursue their Bachelor's Degree in Hospitality Management (Honours)
with Berjaya University College of Hospitality and a career opportunity with
KRR upon completion of the course. The scholarship, valued at RM100,000
annually, is open to the public and employees of KRR.
Franchisor
1) What is
the company’s current financial status?
Financial
Result
BFood registered a revenue growth of 19% from
RM60.42 million in the previous year to RM71.94 million this year. Pre-tax
profit was RM12.58 million, an increase of 21% compared to RM10.40 million for
the previous year. The increase in revenue and pre-tax profit were mainly due
to an increase on comparable store sales as well as additional restaurants
opened during the financial year under review. Consequently, profit after tax
also increased 17% from RM8.68 million to RM10.19 million. Currently, there are
68 KRR restaurants nationwide comprising 55 BRoasters owned restaurants and 13 franchised
restaurants. BRoasters plans to open a total of 15 restaurants nationwide in
the financial year ending 30 April 2012.
Dividend
The Board declared a first interim dividend of 3 sen
single-tier exempt dividend per share in respect of the financial year ended 30
April 2011, which was paid on 22 July 2011.
Significant
Corporate Developments
1. On 19
January 2011, BFood completed the acquisition of the entire issued and paid-up
share capital of BRoasters comprising 17 million ordinary shares of RM1.00 each
from Berjaya Group Berhad for a purchase consideration of about RM72.09 million
which was settled via the issuance of about 141.35 million new BFood ordinary
shares of RM0.50 each at the issue price of RM0.51 per share.
2. On 8 March
2011, BFood was listed on the Main Market of Bursa Malaysia Securities Berhad.
3. On 26 July 2011, BFood entered into a conditional
joint venture agreement with PT Mitra Samaya (“MS”), PT Harapan Swasti Sentosa
(“HSS”) and PT Boga Lestari Sentosa (“PT Boga”) to develop and operate the KRR
franchise in Java Island and Bali, Indonesia under PT Boga.
2) Who are the competitors?
The
Chicken Rice Shop
The Chicken Rice Shop (TCRS) is a chicken rice
fast-food restaurant and Halal family restaurant chain in Malaysia. The chain is
operated by TCRS Restaurants Sdn Bhd, a company incorporated in Malaysia, which
was established in June 2000.
The Chicken Rice Shop serves what it calls
"grandmother's traditional Hainanese secret recipe chicken rice" and
local Malaysian dishes.
With the successful growth of TCRS in their domestic
markets, they plan to spread the culture of the Malaysian way of life into the
Indonesia market 2007, followed by Australia, Singapore and other Asian
countries. Their slogan is Bukan Sekadar Nasi Ayam: (Not just Chicken Rice) in
Malay and "Chicken Rice and More" in English.
KFC
KFC (Kentucky Fried Chicken) is a global chain of
fried chicken fast food restaurants with its operational headquarters in
Louisville, Kentucky in the United States. It was developed and built by
Colonel Harland Sanders, who began selling fried chicken from his roadside
restaurant in Corbin, Kentucky from 1930. Sanders was an early pioneer of the
restaurant franchise concept, with the first "Kentucky Fried Chicken"
franchise opening in Utah in 1952. The company's rapid expansion meant that it
grew too large for the aging Sanders to manage, and he sold the company to a
group of investors in 1964. Sanders continued to act as the chain's goodwill
ambassador until his death in 1980, and his image remains an important part of
the company's branding and advertisements, where he is often known simply as
"The Colonel".
In 1971, Kentucky Fried Chicken was sold to Heublein
for $285 million who were taken over by R.J. Reynolds in 1982, who sold the
chain to PepsiCo for $850 million in 1986. PepsiCo spun off its restaurants
division as Tricon Global Restaurants in 1997, which subsequently changed its
name to Yum! Brands in 2002. As a Yum! subsidiary, KFC is a core component of
one of the largest restaurant companies in the world.
By December 2011, there were over 17,000 KFC outlets
in 105 countries and territories, making it the second largest restaurant chain
in the world after McDonald's. Its two major single markets are in its home
country and China, which together contain around half of all KFC outlets. KFC
primarily sells fried chicken pieces and variations such as chicken burgers
(chicken sandwiches [US]) and wraps, as well as side dishes such as french
fries and coleslaw, desserts and soft drinks, predominantly from PepsiCo. Its
most famous product is its pressure fried "Original Recipe" chicken
pieces, which are flavored with Sanders' 1939 recipe of 11 herbs and spices.
The exact nature of these ingredients are unknown, and represent a notable
trade secret, perhaps second in notoriety to only the Coca-Cola formula.
In the mid 1990s, KFC witnessed protests from
leftist and nationalist groups upon its arrival in India. Eric Schlosser’s book
Fast Food Nation (2002) and Morgan Spurlock's film Super Size Me (2004) were
two prominent critiques of fast food and its consequences. KFC has been
especially hard hit by negative publicity as the target for much of PETA's anti
animal cruelty campaigning, although KFC executives have protested that the
chain is unfairly singled out for criticism. In the 2000s, campaigners were
able to persuade the chain to change to healthier frying oils in a number of
regions. The chain has also been accused of contributing to the destruction of
the world's rainforests with its unsustainably sourced cardboard and paper
packaging.3) What is my total estimated cost to open?
Fee Structure and Capital Set up Cost as :-
Franchise Fees
: USD 25,000
Royalty & Marketing Fees : 5%
Capital setup cost per restaurant for an : USD 250,000
4) What is
the Franchisor mission?
To be your home away from home, a casual dining
restaurant that offers friendly service in a comfortable setting.
5) What is
the Franchisor Vision?
To be the preferred choice
for delicious and healthy chicken meals.
6) How many franchised
units (stores or outlets) now?
KRR International Corp. is
the franchisor for Kenny Rogers Roasters in the USA. They have awarded the
Master Franchisee to Malaysia, Singapore, Indonesia, China, The Philippines,
Bangladesh and Brunei. The company is a wholly subsidiary of Berjaya
Corporation Berhad and was incorporated in 1994
Popular Country and
Western singer, Kenny Rogers and former Governor of the state of Kentucky, John
Y Brown Junior, originally set-up Kenny Rogers Roasters in 1991. Seeing an
opportunity to provide healthy and delicious food in a restaurant environment,
Kenny Rogers Roasters opened its first restaurant in Coral Spring, Florida in
August 1991.
Currently, Kenny Rogers
Roasters has more than 230 stores worldwide. As a franchisor, the company is
moving forward aggressively into other selected international territories
namely Southern China, India, Thailand, Middle East and the Eastern Seaboard of
USA through franchising and joint ventures.
7) What are the strategies marketing of
Franchisor?
a. A Healthy Menu Out of
Fresh, Quality Dishes
Today's consumers are
making healthy lifestyle choices by becoming more aware of what they eat and
consuming wholesome food that are not only healthy but convenient. Chicken
consumption is increasing and Kenny Rogers ROASTERS' rotisserie roasted chicken
which is marinated in natural citrus, herbs and spices provides consumers the
healthy and convenient alternative to traditional fried chicken. In addition,
Kenny Rogers ROASTERS' menu of wholesome hot and cold side dishes gives
consumers various choices of fresh and delightful food.
b. Top-of-the-Mind
Awareness
Our marketing efforts
constantly emphasize on Kenny Rogers ROASTERS as "the favourite place for
rotisserie roasted chicken", its healthy attributes and unique differences
in order to create ongoing top-of-the-mind awareness and reminder in consumers'
minds.
c. Attractive Price
Kenny Rogers ROASTERS
offers absolute value-for-money that translates to wholesome meals that are
attractively priced at the convenience of a full service restaurant.
Franchise
1. How much does your franchise gross per year? How
much does it net? Are the procedures followed to make royalty payments to the
franchises burdensome?
300k - 400k .
100k- 200k. Yes, 5%.
2. Are the financial projections of revenues,
expenses and profits that the franchisor provided me accurate in your judgement?
Yes.
3. Does the franchisor give you enough assistance in
operating your business?
Yes.
4. How many hours, on average do you work a week?
Average 72 hour per week.
5. How often do you get a vacation?
Every week one day off.
6. Have you been caught off-guard by any unexpected
costs or expectations?
No.
7. Does your franchisor provide ongoing training and
support to you?
Yes.
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