Steve Hansen is the master of reinvention when it comes to the cooked chook.
Steve Hansen is the master of reinvention when it comes to the cooked chook.
Having started his career as a Chicken World franchisee in the early 1980s, over time, Mr Hansen acquired a group of five stores and in 1991 branched out on his own, establishing fast food chain, River Rooster.
However, 10 years later, the company’s brand was, by Mr Hansen’s own admission, “looking tired” and was too similar to its competitors’ brands – a sentiment he said was confirmed by a customer survey.
In 2003, the decision was made to rebrand the company’s then 15 stores, within a timeframe of eight months and at a cost of less than $1 million to the group.
The result was CHOOKS fresh & tasty, which has more than doubled its presence in WA to 31 outlets and increased revenue by nearly 50 per cent since.
Mr Hansen said the rebranding had delivered revenue growth that was maintained for a long period.
“We were holding between 8 and 9 per cent, year-on-year growth; prior to that and we went to 17 per cent,” he told WA Business News.
Mr Hansen said the company had been planning a national expansion at the time, but reconsidered after being overwhelmed by interest from within the state.
“The inquiries from WA, because we were an emerging brand here, started skyrocketing,” he said.
Central to the business’s profitability model is affordable rent for franchisees, which is achieved by avoiding the sky-high rents charged by major shopping centres in favour of smaller neighbourhood centres.
“What I find really interesting now is that, because I’ve tackled the neighbourhood shopping centres and gone in that direction, over the last few years there’s a few others who’ve said ‘that must be working’, so they’ve followed,” Mr Hansen said.
“My guess is that my major competitors might be pushing in that direction shortly.”
Mr Hansen also ensures the business maintains low capital costs, which in the early days meant purchasing second-hand equipment to keep franchisees’ costs down.
The business also no longer uses a fit out company for new stores.
“We have an independent fit-out contractor and he just gets a fee, which is about half of what most of the majors would charge,” Mr Hansen said.
“You can keep your real capital costs to a level that’s way under $300,000 and those [franchisees] know that if they run their business properly, to the percentages that we show they should work at, provided they get the sales in the front door, then they’ve got very good returns.”
Mr Hansen said selling the company stores and focusing on building the business was one of the best moves he ever made.
“It took me a long time to realise that I had to stop being the franchisee and become the franchisor, and run the franchisor business,” he told WA Business News.
A store is currently being built at the company’s new headquarters, which will be used for training purposes to assist franchisees and ensure a better standard of training.
The business has also created an Encouragement Centre for franchisees, to provide support for franchisees and strengthen the company’s internal culture.
