The King is dead - long live the Colonel
By : Juliet D. Golden
American Restaurants (AmRest) plans to close 22 Burger King stores it recently acquired from International Fast Foods Polska (IFFP) to make way for a rapid expansion of its KFC brand, the company announced last week.
Wroclaw-based AmRest holds the master franchise license for Pizza Hut and KFC in Poland and the Czech Republic. The majority of the company is held by five individual investors including AmRest President Henry McGovern and Don Kendall, founder and chairman of PepsiCo for 27 years. Tricon Global Restaurants, which operates more than 30,000 restaurants in 103 countries, owns 49% of AmRest.
AmRest purchased IFFP last November from IFFC, owner of the franchise licenses for Burger King and Domino's Pizza in Poland. However, until last week the company had remained tight-lipped as to the fate of the Burger King brand. "It's a big step for KFC as a brand," McGovern said.
The announcement came as AmRest opened its 100th restaurant, a KFC at the Gdansk central train station. McGovern said the conversion of the Burger King sites will allow the company to buttress its drive-through business. "It doubles the size of the drive-through network, which has been our focus," McGovern said. "It shows where we want to grow our business right now."
AmRest held back on announcing formal plans for Burger King awaiting final approval of the acquisition from Poland's anti-monopoly office, which came through two weeks ago. After this, the conversions of the Burger Kings should be completed by June, according to Joseph O'Connor, marketing director at AmRest.
AmRest is the second-largest fast food operator in Poland. Since entering the Polish market in 1992, McDonald's has opened 183 restaurants in Poland, the majority of which are company owned. McDonald's officials said earlier this year that they plan to open their 200th restaurant in the second half of 2001.
The third fast food player on the market is Telepizza Poland, which is owned by the Spanish food conglomerate Campofrio, a majority stakeholder in the Morliny meat plant in Poland. From March this year, the company had 61 outlets opened around the country, which are mainly small sales and delivery units. Earlier this year Telepizza announced that it would focus on developing its dine-in pizzeria business. By the end of this year, the company plans to open 30 sit-down outlets around the country.
AmRest last week also announced it will float up to 70% of the company on the Warsaw Stock Exchange in 2003. "We would sell 60-70% of the (company) and we would be looking to raise $100 million," O'Connor said. The money raised through the IPO would not only allow for new Pizza Hut and KFC openings across Poland and the Czech Republic, but it will also fund new fast food concepts AmRest is looking to launch in the region during the next couple of years, O'Conner said.
