ATLANTA The chief executive of Church’s Chicken on Monday outlined his plans for the fast-food chain, which include the rollout of mobile units and kiosks at alternative sites, an expanded value menu, and more aggressive franchising.
Harsha V. Agadi, chief executive of the 1,650-unit chicken chain, told Nation’s Restaurant News that Church's plans to introduce the mobile units and kiosks later this year at such on-site locations as convention centers, universities, state fairgrounds and shopping centers.
“The kiosks are going into test this year and will be located in malls and potentially movie theaters and on college campuses,” he said. “We already have one at a large Hispanic grocery store in Texas, called Fiesta. As far as the mobile units are concerned, initially there will be very few, just three or four, but we will be scaling that up.”
Agadi said the kiosks and mobile units would feature an abbreviated menu of Church's most popular items, including bone-in chicken, tenders and sandwiches.
In an effort to appeal to value-focused customers, Church's will add to its 99-cent value menu, which it recently cited as a sales driver. Agadi said he expected the expanded value meal "would exceed more than 10 percent of our menu."
"We are cognizant of the fact that there is higher unemployment, lower paychecks and higher taxes," he said. "If we don’t deliver value, then we’re not doing our part in this recession. Let us not overcharge the consumer.”
Church’s is on target to open 120 U.S. stores this year, largely through franchise agreements with immigrant operators who have better access to foreign credit markets, Agadi said.
“There is a large slew of new franchisees that are Asian immigrants, and they generally are real-estate rich and able to approach Korean, Chinese and Taiwanese banks as opposed to banks and private-equity funds here in the U.S.,” he said.
Agadi said the chain expects to recruit more franchisees in part by offering a new modular design that requires less time and money to build than a traditional unit does.
“It’s not necessarily new in the industry; a few other brands have done this,” he said, “but we’ve decided to make this the core strategy of our expansion. It is constructed in a factory, a controlled environment, and that accelerates the construction schedule, making it 30 to 60 days faster. And the cost ranges from as low as $50,000 a store to up to $150,000.
"The other benefit is that [the units] are treated like equipment,” he added. “For tax purposes they depreciate over a period of seven years instead of 39 years and bring savings to our franchisees.”
The first modular unit debuted April 1 in Lawrenceville, Ga.
Church's Chicken is owned by Atlanta-based private equity firm Arcapita Inc.
Contact Elissa Elan at [email protected].
