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.