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In their second coming, global chicken chains look to take on KFC in India


The UK and US-based chains like Southern Fried Chicken, Texas Chicken and Genuine Broaster Chicken are re-entering the Indian market through different franchise arrangements after chickening out of making a fresh beginning in the organised chicken segment.

“The organised fried chicken segment is estimated at ₹1,500 crore, growing at a CAGR of 20 per cent. KFC may have been in India for the past 20 years with more than 500 outlets but it is struggling with its unit economics.

“We intend eating into its fried chicken pie with cheaper ticket size and healthier offerings using less oil and will be scaling up fast with 20 outlets in the next 10 months,’’ says Karan Tanna, Founder & Chief Executive Officer, Yellow Tie Hospitality (a-year-old food and beverage franchise company).

The US-based Genuine Broaster Chicken re-entered India last year since it was unable to scale up its operations in 2007. “There was less infrastructure to scale up with lack of logistics and skilled manpower for handling frozen food. But in the past decade there has been improvement and this time we intend getting aggressive in the casual dining and QSR (quick service restaurant) segment and would be taking on KFC in the next two years,’’ added Tanna.

The UK-based Southern Fried Chicken, which had also left the country in 2010, is again willing to invest ₹100 crore in the first two years through master franchises across 20 markets with its first outlet in Hyderabad this year.

Andrew Withers, Chairman, Southern Fried Chicken, said, “While the market is strong and large in India, there would be more competition compared to the UK. We may have the same pricing as KFC in the UK but our chicken is not frozen or processed like our competitors. “Even in India, we plan to locally source fresh produce for our restaurants. Our chicken has less oil with strong chilly flavours which will suit the Indian market. We will divide India into 20 regions and have master franchises to run the operations with Hyderabad being our first market.’’

Franchise India is responsible for bringing some of thechicken brands again into the country.

“Today, KFC is the strongest chicken brand but there are already more than 5,000 fried chicken brands in the Southern states like Tamil Nadu and Kerala…high capex may have hurt big players like KFC but the new entrants are expected to grow faster and have different capabilities in the QSR segment,’’ says Gaurav Marya, Chairman, Franchise India.

Challenges remain

However, it will not be easy for these chains to make a mark in the challenging QSR segment. “Chicken is still an unorganised category and the new players are taking a second chance in India thinking they are going to be doing it better with smarter real estate deals. But even KFC is struggling and the new players possibly are willing to lose money initially in the QSR category, which is not growing as fast as it should,’’ observed Harminder Sahni, Managing Director, Wazir Advisors.

Source: Hindu Business Line

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