Red Rooster deal works a treat

AUSTRALIAN Fast Foods, the operator of the Chicken Treat fast food chain, has bought the national Red Rooster chain following Coles Myer’s decision to sell off the fast food business as part of a strategic review.

It’s understood the 244 Red Rooster stores and 50 franchise stores have been sold at a small loss for Coles Myer.

However, AFF was unwilling to discuss any of the financial details of the deal, which was put together by Ernst &Young and Deacons.

The deal presents some exciting opportunities from a marketing perspective and, although no decision has been made about Red Rooster’s advertising account, AFF hasn’t ruled out the possibility of servicing the account out of Perth.

Rival currently looks after Chicken Treat’s advertising requirements.

Chicken Treat denied it was considering any deal with Red Rooster when Business News contacted it earlier this month.

Australian Fast Foods managing director Frank Romano said Red Rooster would retain its Melbourne head office and Chicken Treat will continue with its Perth headquarters.

“Although this is a very significant and exciting new chapter for our company, we will be reclaiming some familiar turf with the return of 150 Red Rooster stores in Queensland and NSW, the majority of which we sold to Coles Myer under the Big Rooster banner,” Mr Romano said.

There is no imminent move to make any changes to the Red Rooster or Chicken Treat brands in WA.

“The Chicken Treat brand and the Red Rooster brand have both lived in this State for over 20 years, and WA has been a very good state for both brands,” Mr Romano said.

The acquisition will deliver AFF almost 400 stores located in every mainland State of Australia.

Although both brands include a number of franchised outlets, this accounts for only 15 per cent of the entire network.

AFF will continue to build on the al fresco style outlets that both Red Rooster and Chicken Treat have pushed in the market.

The growth of Red Rooster on the eastern seaboard has been held back in part by difficulties in acquiring suitable property, according to Mr Romano.

“There also hasn’t been the desire to grow and that probably left it 20 to 30 stores behind in development,” Mr Romano said.

“We’ll probably have growth of 20 to 30 stores by June 2003.”

AFF is undertaking a review of the corporate structure of Red Rooster, however this is not expected to extend to the in-store staff.

“A corporate review is where we’ll find what changes need to be made to do what we want to do with the fast food business,” Mr Romano said.