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Kentucky Chicken comes home

FINANCIAL STANDARD
By | August 23rd 2011
By | August 23rd 2011
FINANCIAL STANDARD

By Kenneth Kwama

 

One of the most popular chicken restaurants in the world, Kentucky Fried Chicken (KFC) has opened its first store in Kenya as the chain looks to expand its footprint to other markets in the region.

The entry of KFC into the Kenyan market is expected to raise the bar in the fast food business and give established players such as Kenchic, Galito’s and Chicken Inn a lot to ponder about because of its strong brand, insistence on quality of service to clients and financial muscle.

The eatery opened its first store at the Junction Mall on Ngong Road a fortnight ago and has already announced plans to open two other stores at the Galleria Mall and Kimathi Street in Nairobi’s Central Business District (CBD).

The rollout is expected to expand to other major towns like Mombasa, Kisumu and Eldoret within the next three years.

“We have instituted policy and procedural programmes to enable the franchise to improve on its operations and conform to the highest levels of food safety and service,” says Gavin Bell, General Manager KFC.

KFC brand name is owned by Yum! Brands — the world’s largest fast food restaurant company. The US-based global franchise operator also owns Taco Bell, Pizza Hut, and Long John Silver brands globally.

Kenya has been witnessing increased purchasing power among the middle class in the past few years. This has in turn driven retailers and real estate developers to invest in shopping malls — an investment frenzy mainly driven by new purchasing power in a struggling economy. 

The middle class will also form the core target of KFC whose entry is also sweet news to suppliers such as Kenchic, which is already supplying chicken.

Other suppliers will have to undergo a strict vetting process in order to qualify for a duty expected to offer them a field day once established.

KFC has a strict process of picking suppliers — who must meet global standards before being approved.

The expectations can be deduced from the experiences derived from the interactions between Yum! Restaurants International (YRI) Ltd, which oversaw the set-up of the first local KFC restaurant and the set-up team, which comprised Bell.

Although Bell did not disclose the amount the firm is expected to invest in the whole process, there are indications the whole venture is a massive capital undertaking that involves very elaborate processes. 

According to information posted on YRI’s website, for one to qualify as a franchise holder, they should be in a position to fund five to 10 store builds within a span of five years. A typical store costs about Sh60 million to set up.

“Having capital for only one store will not be sufficient to sustain the required store growth,” states the website.

In addition, potential franchise holders are required to pay a non-refundable administration fee of about Sh65,000 upon submission of the application form.

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