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Old January 21st, 2011, 09:41 AM   #1
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KFC to expand footprint in Kenya

Kenyans will soon have an opportunity sample delicacies from Kentucky Fried Chicken, one of the most popular chicken restaurants globally, as the chain looks to expand its footprint in the region.

Popularly known as KFC, the restaurant chain plans to open two outlets in Nairobi by mid this year — with a third one opening doors to customers by end year to tap into the growing middle class in the country.

KFC is a US-based company with a global footprint.

South African entrepreneur Simon Schaffer has bought the franchise licence to run the business.

“There is an appetite for a brand like this in Kenya. There is already a fast food culture that is growing,” said Mr Schaffer in an interview with Business Daily in Nairobi.

KFC’s entry in Kenya is a continuation of a long family tradition.

Mr Schaffer’s family has been a KFC franchisee for over 30 years when his father opened the first store in South Africa, and where he spent two years learning everything that he knows about the brand. The family operates 40 restaurants.

It is not as easy as it sounds though. “The franchise rights don’t come cheap and we have the capital backing to set up (the business).”

After working for close to six years as an investment banker at Rand Merchant in South Africa Mr Schaffer, who holds a masters degree in International Finance from the University of Amsterdam, decided to join the family business by opening up his own KFC franchise outside his home country.

Experienced

He flew north to Kenya and together with other investors formed Kuku Foods Limited.

To achieve his dream, he employed Gavin Bell, a franchise consultant and an experienced restaurateur who owns Kengele’s restaurants chain, as the general manager.

Mr Bell will oversee day to day operations of KFC in Kenya.

The capital investment to set up shop remains their secret — thought it runs into millions of shillings.

Mr Schaffer told us that one does not get the rights to run such a franchise without “a healthy balance sheet” to support the roll out.

Currently, 10 Kenyans are being trained in South Africa on the KFC brand.

They will gain exposure on how the restaurants are operated and understand the international procedures expected. The training takes three months.

The Kuku Foods team has spent the last few months ensuring they get the right suppliers on board, who meet the international standards expected by KFC.

Kenchic, a local commercial poultry firm, will supply chicken.

At least four tonnes of chicken, almost 4,000 birds, will be needed every week for each of the two planned restaurants to cater for KFC’s clients.

Lack of local producers of frozen chips will see the company import the raw material from Egypt.

Most of the fast foods in the country use pre-cooked chips, which do not meet KFC standards.

Strict process

“KFC has a strict process and our suppliers have to go through an audit before being approved as the quality has to meet global standards,” Mr Schaffer said.

Other supplies such as cooking oil, mini loaves, packaging, buns and vegetables will be sourced locally.

The brand offers an opportunity for local suppliers to grow their businesses, said Mr Bell.

The entry of KFC in the Kenyan market is driven by the increasing number of households in the country with disposable incomes as the economy grows.

Economic growth was projected at 5.2 per cent last year, according to the Central Bank of Kenya.

The country has been witnessing increased purchasing power among the middle class, with retailers and shopping centre developers investing in expansion plans.

Retailers such as Deacons, Nakumatt, Bata, and Tuskys have been opening up new outlets to tap into the growing middle class.

In turn, developers are putting up shopping centres to meet demand for space by retailers, restaurants and banks with Galleria — at the intersection of Magadi and Lang’ata Road — opening in December 2010.

Phase two of Junction Mall is expected to open doors in April with Greenspan, in Eastlands, opening up mid year.

KFC plans to open its stand-alone restaurants, outside of the food court concept, in the second phase of Junction and Galleria malls with the first one expected to start operating on June 1.

In addition, Kuku Foods is scouting for locations in Nairobi to open up other restaurants, and eventually introduce the “drive thru” concept.

“Kenya is ready for a drive thru. It could work here and it is something we want to introduce down the line,” said Mr Schafer.

Raise the bar

Entry of the brand is expected to raise the bar in the fast food business and give players such as Galito’s, Chicken Inn, and Kenchic a run for their money.

Founded by Colonel Harland Sanders, who has remained a key feature in the company’s advertising, KFC is a fast food restaurant that mainly sells chicken and is looking to roll out a massive Africa-wide expansion, using South Africa as a base.

KFC is part of Yum! and also owns Taco Bell, Pizza Hut, and Long John Silver brands globally.

Yum! has its eye on expanding KFC footprint on the continent though the franchise model.

There are about 650 KFC outlets on the continent, majority of which are in South Africa where the first restaurant was opened in 1971.

Speaking last month at a US investor conference, the general manager Africa at Yum!, Keith Warren, said the firm was eyeing to expand in East Africa, Angola, Zambia, Ghana, and Nigeria this year.

“Africa is now beginning to boom,” he said. In Nigeria, the company is planning to open 20 KFC outlets. Yum! forecasts that it will have 300 KFC restaurants in Nigeria by 2020, with over 100 units expected to open in East Africa in the same period. The first Nigerian KFC restaurant opened in December 2009.

Africa’s fast economic growth has led to the region increasingly being viewed as the new consumer market frontier, with international retailers moving in to tap into emerging opportunities.

Wall-mart is expected to enter the region.
http://www.businessdailyafrica.com/K...j/-/index.html
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Old January 21st, 2011, 09:45 AM   #2
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finally Kenchic will have real competitor let the fattening starts
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Old January 21st, 2011, 10:10 AM   #3
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finally Kenchic will have real competitor let the fattening starts

niice,finally! So tthe first KFC will open in Nakumatt Junction?perfect location.They should think of opening the other outlet at WestGate, JKIA airport and another in the city centre.
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Old January 21st, 2011, 05:17 PM   #4
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niice,finally! So tthe first KFC will open in Nakumatt Junction?perfect location.They should think of opening the other outlet at WestGate, JKIA airport and another in the city centre.
I think they will eventually roll out into most malls as well as the CBD. They will obviously cater for the higher end of the market competing with the likes of Steers, Galitos, Wimpy while Kenchic will continue with its end of the market.
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Old January 21st, 2011, 05:20 PM   #5
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They can't take out Kenchic...its just too widespread and pocket friendly. Plus, the article says KFC will source their chicken from Kenchic anyways.
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Old January 21st, 2011, 09:41 PM   #6
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Plus KFC's type of chicken is different from Kenchic.Kenchic grills chicken then fries.KFC is simply, fried chicken.
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Old January 21st, 2011, 11:46 PM   #7
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i am not a big fan of these international fast food chains but i honestly believe that KFC will provide the much needed kick in the arse to kenchic. kenchic hasnt had step up its game because it does not have a strong and able competitor. now kenchic will be forced to elevate their game.

this in the end might end up being good for the consumer
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Old January 22nd, 2011, 12:39 AM   #8
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Not a fan of fast food & meat in general but this will bolster competition in the market. Though i doubt kenyans will prefer KFC to kenchic.
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Old January 23rd, 2011, 04:56 PM   #9
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There used to be KFC on Moi Avenue and Wstlands in the 70s and 80s
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Old January 23rd, 2011, 05:11 PM   #10
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There used to be KFC on Moi Avenue and Wstlands in the 70s and 80s
They closed shop along time ago.
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Old January 25th, 2011, 06:51 PM   #11
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with the success of KFC, watch McDonalds, Subway and Burger King follow the same path, especially with the urbanization of kenya's cities and the growing middle class
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Old February 1st, 2011, 11:28 AM   #12
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Jesus christ. This means more fat people in Kenya over the next years. Which in turn means more diabetes patients, heart attacks and overwhelming of the country's health care facilities. SMH
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Old March 9th, 2011, 09:50 PM   #13
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Thats awesome! By when is it expected that the first KFC outlet in Kenya will open up its doors to the general public ? Has construction started on the site or has a board been put up so far ? Any billboard for the that matter like coming soon
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Old March 10th, 2011, 12:00 AM   #14
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Thats awesome! By when is it expected that the first KFC outlet in Kenya will open up its doors to the general public ? Has construction started on the site or has a board been put up so far ? Any billboard for the that matter like coming soon
2 will open by June 1st.They will not be constructing.They will rent out space at the Junction and Galleria mall.All they will probably do is interior design and deco,branding and putting up equipment.
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Old March 10th, 2011, 02:17 PM   #15
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2 will open by June 1st.They will not be constructing.They will rent out space at the Junction and Galleria mall.All they will probably do is interior design and deco,branding and putting up equipment.
Kwani they skipped Westgate? Junction and Galleria serve Lavington and karen/Langata areas. How could they ignore Westlands?
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Old March 10th, 2011, 07:34 PM   #16
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Kwani they skipped Westgate? Junction and Galleria serve Lavington and karen/Langata areas. How could they ignore Westlands?
I was also wondering the same! westlands is fast food capital! But i think it has to do more with logistics issues.First,Westgate seems to be all rented out.The cost of rent at westgate is also very high.Sarit centre is also rented out.Keep in mind,KFC have indicated they do not want to be squeezed into a food court competing with other players like galitos,wimpy etc.They want a standalone restaurant,which is clearly visible and has enough seating space.

The 2nd phase of the Junction and the new galleria mall offer KFC that perfect opportunity.A few problems with this approach is, KFC is mainly a lunch time affair,i don't see many Kenyans buying KFc for dinner.The locations of Junction and Galleria,clearly leaves out a good percentage of working kenyans who might need a quick meal during lunchtime.

KFC will turn out to be a treat,rather than a quick meal.A place where you plan to go,and not a place where you stop by to buy food.This is not good for the owners of the franchise.

I hope they have other good mitigating reasons for their choices.
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Old March 11th, 2011, 03:20 AM   #17
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Jesus christ. This means more fat people in Kenya over the next years. Which in turn means more diabetes patients, heart attacks and overwhelming of the country's health care facilities. SMH
Worry about that when everyone in Kenya can afford to eat KFC.

This is a positive sign that foreign companies see Kenya as a potential market, meaning Kenya's economy is emerging and people are starting to earn money to spend.
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Old May 29th, 2011, 09:26 PM   #18
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Any developments on this?
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Old May 30th, 2011, 01:08 PM   #19
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Any developments on this?
The first store is to open at the Junction mall. From what I've seen, they are still working on the interior of the new section of this mall where KFC intends to open shop. We will have to wait for a little while longer. (Or maybe they intend to open it in the food court).
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Old May 30th, 2011, 02:14 PM   #20
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Thanks Kenguy,

Economically, I think Kenya will benefit from international fast food chains.
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