After being away from Taiwan for a decade, the nation's fast-food pioneer, Joseph Han (韓定國), is back, with a mandate to lead KFC into battle against arch-rival McDonald's.
Han took over the post of the nation's second-largest fast-food chain's managing director from his predecessor, Olga Wu (
The 55-year-old fast-food franchise veteran is widely seen as the man who can help KFC narrow the market share gap with McDonald's.
Last year, KFC's store expansion and business revenues failed to reach the company's original targets, which the company attributed partly to the worse-than-expected macroeconomic environment.
Early last year, KFC said it planned to double its number of outlets in Taiwan within five years -- meaning at least 250 stores by 2010. McDonald's ran around 350 outlets by the end of last year and aimed to add 10 to 20 new outlets per year in Taiwan within the next three years.
Some help
To accomplish this unprecedented expansion plan, Yum Restaurants (Taiwan) Co (台灣百勝肯德基), which operates the KFC business, hired Yu Guowei (虞國偉), previously responsible for KFC development in China's Zhejiang Province, to serve as the associate director for development in Taiwan.
With Yu's addition to the management team, KFC opened 10 stores last year alone, compared with its earlier slow move of only adding six new outlets over four years due to a lack of expansion experience.
"Our expansion plan was confirmed last year and remains unchanged, unaffected by the change in chief," said Han in his first press conference on Saturday after assuming office.
"There's no cap on Yum's investments in Taiwan but the difficulty in finding good locations will be the major obstacle," he added.
The nation's real estate market has sizzled in recent months, with housing prices soaring but transaction volumes being less impressive. Landlords generally demand rents that are higher than what restaurant operators can afford, greatly squeezing the sector's already thin margins.
He said that landlords and tenants should maintain a friendly partnership as restaurants' contracts usually exceed 10 years. He added that favorable locations would secure stable operations.
The plan
Still, KFC will speed up its expansion plan and build drive-throughs for automobiles and even scooters in big cities and areas between first- and second-tier cities to provide more convenience for consumers.
As more Taiwanese own cars and travel more, drive-through restaurants will become more profitable.
While the nation's car sales plunged 29 percent year-on-year to 366,311 units last year, industry watchers like Sam Wu (吳鴻昇) of Yuanta Core Pacific Capital Management (元大京華投顧) forecast the market to pick up 6.5 percent and exceed 390,000 units this year.
Meanwhile, as the bad consumer loans problem further eases this year, the private-run Taiwan Institute of Economic Research (TIER, 台經院) said its business climate index of the service industry increased 2.76 points to 109.75 last month.
The institute said last week that entrepreneurs in the retail, wholesale and restaurant sectors became more optimistic last month over the nation's economic outlook as domestic consumption is expected to grow 2.83 percent this year from 1.36 percent last year.
Han said that although he was away from Taiwan for more than 10 years, he had kept a close eye on the nation's food and beverage (F&B) market.
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