ThaiBev becomes final KFC franchisee

ThaiBev becomes final KFC franchisee

B11.3bn agreement with Yum finalised

The franchisee strategy is hoped to boost KFC in Thailand to reach 1,000 branches in the near future.
The franchisee strategy is hoped to boost KFC in Thailand to reach 1,000 branches in the near future.

Yum Restaurant International Thailand has fulfilled its goal of having all KFC outlets operate as franchises, with Thai Beverage Plc (ThaiBev) being the third and last franchisee in Thailand.

Yum on Tuesday signed a franchise agreement worth about 11.3 billion baht, with The QSR of Asia (QSA) (an indirect wholly-owned subsidiary of ThaiBev), to operate about 240 KFC stores in Thailand.

The move puts KFC branches in under three franchisees -- Central Restaurant Group (224 branches), Restaurant Development Co (128 branches) and 240 branches for QSA.

Yum Thailand's refranchising effort is part of parent company Yum Brands Ink's strategy to accelerate global growth through franchise partnerships, according to Waewkanee Assoratgoon, KFC general manager at Yum Thailand.

"The franchise scheme is part of our global strategy for sustainable long term growth. We believe there is still huge opportunity to open KFC outlets in Thailand, so we need franchisees with potential and capital to expand our stores," she said.

The transfer of Yum Thailand's restaurants is expected to be completed by the end of 2017.

The company did not disclose details of the rights for QSA or locations where QSA will operate.

Central Restaurants Group has the right to open KFC branches across the country and some locations in the South, while Restaurant Development Co holds the rights to open KFC in the South and Bangkok.

Previously Yum Restaurant Thailand sold Pizza Hut to the Mahagitsiri Family, the producer of Nescafe coffee and marketers of several food products.

Apart from Thailand, there are several countries that have more than one franchisee for KFC outlets, including Australia, the United Kingdom and India.

QSA is managed under Food of Asia Co, ThaiBev's food product group flagship company in Thailand.

Food of Asia managing director Nongnuch Buranasetkul said that Food of Asia's vision is to be the leading quality food company in Asean with various foods for every lifestyle and occasion.

"We have a strong organisation with financial resources and restaurant experience, which enables us to aggressively build and operate KFC restaurants."

Mrs Waewkanee said that Yum will change the company's role to "brand innovation centre" from "restaurant support centre".

"There are no business conflicts between three franchisee partners as we will work together via 'Brand Council', which comprises executives from all three franchisees, to create identical experiences at all KFC restaurants," Mrs Waewkanee said.

The franchisee strategy may boost KFC in Thailand to 1,000 stores in the near future, increasing from its earlier plan of 800 stores within 2020. As of July this year, there are around 600 KFC restaurants across the country.

Mrs Waewkanee said that the huge potential to expand KFC exists not only because of franchisees but also other positive factors that spur demand for KFC, including the government's Eastern Economic Corridor that will induce greater economic activity in the region.

"Due to the current economic environment and the slowdown of consumer spending power, the launch of new restaurants will help generate better growth than seen through same-store sales," she added.

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