Popeyes Chicken enters Indonesia
JAKARTA (JP): American franchised restaurant Popeyes Chicken & Biscuits is pecking its way into Indonesia through PT Cipta Selera Murni, the franchisee of Church's Texas Fried Chicken (TFC) restaurant.
Executives of Cipta Selera and America's Favorite Chicken Company Ltd., the franchiser for both TFC and Popeyes, signed contracts for the extension of TFC franchising and the new franchising of Popeyes to Cipta Selera here on Saturday.
Dick Holbrook, president of America's Favorite Chicken Company, said TFC and Popeyes will not compete with each other as they target different markets.
Popeyes will target middle and upper-class customers, while TFC will continue to focus on the middle and lower classes, Holbrook explained.
"TFC and Popeyes will, side by side, compete with our main competitors here," Holbrook said, adding that American-franchised Kentucky Fried Chicken is the main opposition for his franchised restaurants both in their home country, the United States, and in Indonesia.
He said Asia, especially East and Southeast Asian countries, is the market with the most potential for franchised fried chicken restaurants because the market in the United States is already saturated and competition there is very tough.
He noted that the 10 largest franchised chicken restaurants in the world have been growing more outside the United States, especially in Asian countries.
Starting in 1992, America's Favorite Chicken Company acquired the franchising rights of TFC and Popeyes that year from A. Copeland Enterprices Inc.
As of last October, the company ran a total of 2,155 restaurants all over the world, including 1,204 TFC restaurants and 951 Popeyes.
TFC established itself in Indonesia in 1984 through Cipta Selera, which currently runs 48 TFC outlets in 13 cities across the country.
Cipta Selera's managing director, Husni Muchtar, said that under the new contract, his company has to pay US$175,000 in franchising fees for each franchised restaurant during the next eight years and another $20,000 for every outlet it opens.
Husni said his company plans to open 60 Popeyes outlets during the next eight years and 30 new TFC outlets during the next seven years.
Milly Suwandi, a director of Cipta Selera, said establishing one independent outlet costs his company Rp 350 million (US150,000) to Rp 400 million, while opening an outlet in a food court costs Rp 200 million.
She added that one outlet of TFC can contribute between Rp 40 million to Rp 150 million a month in revenues to the company, depending on the location and the size of the restaurant.
Cipta Selera is currently 10 percent owned by Husni Muchtar, 60 percent by Husni's father, Atang Latief, and 30 percent by three other individuals, including Husni's brother.
Husni, who assumed his current position earlier this month, acquired the 10 percent stake in Cipta Selera from the former managing director of the company, Emmy Subronto Laras. (rid)