KFC (Germany, Austria, Switzerland and Denmark)
The final ingredient
Through smart selection of its new franchisees, KFC has expanded considerably in the German-speaking world and Denmark. By successfully introducing a delivery service and in-store ordering kiosks, the business is set to prosper against the backdrop of a digital revolution in the fast food industry
The last decade has been a period of tangible expansion for KFC’s business in Germany, Austria, Switzerland, and Denmark (KFC Germany, henceforth). Operating just 64 restaurants on the territory of the four countries in 2008, at the end of last year – when KFC Germany also celebrated its 50th anniversary – the considerable number of 194 outlets has already popped up on the region’s map.
Multiple factors that have come into play can be cited as important drivers of the company’s growth. Foremost the new unit development programme, but also successful cult innovations like the Double Down and building a strong sharing business by running successful bucket promotions on TV. Also included is the active development of the markets in Switzerland and Denmark over the past couple of years. Embracing digital technology and developing advanced methods to facilitate the process of serving customers with unique chicken specialties, will undoubtedly contribute immensely to KFC Germany’s future successful exploits.
“Online ordering and digital advertising are going to grow big time, as the new generation of customers are people who have grown up in a digital world,” remarks General Manager, Marco Schepers. “We have already taken steps towards addressing these ongoing trends and making ourselves even more attractive to the younger customers who already represent the majority of our client base, as 55 per cent of it is formed by people aged 29 or below.”
Not long ago, KFC Germany launched its delivery service in Germany in partnership with Foodora and Deliveroo – a venture deemed very successful by Marco. “Delivery is the fastest growing segment in Germany, at the moment. People are looking for more convenient ways of getting food, so the service quickly gained in popularity. Right now, about a third of our restaurants offer a delivery option and we are definitely keen on introducing it to more outlets, but in order for that to happen, our aggregators need to expand their fleets. Another challenge we both need to work on, is the development of a cash payment option upon delivery,” he discusses.
As a greater number of customers are willing to take firmer control of their ordering process, KFC Germany also installed its first in-store ordering kiosk in 2018. “The concept works for all types of consumers. It allows regular users to order their favourites more quickly, while new customers can take their time to explore our menu in full and craft their order carefully. In-store ordering kiosks are fast becoming the norm in quick service restaurants (QSR), so our plan is to launch these in as many restaurants as possible in the next 18 months,” Marco reveals.
A very successful market entry in Switzerland in late 2017 provides another clear example of KFC Germany’s commitment to breaking new ground. The first outlet the company opened in the Alpine country – in Geneva – broke the chain’s world record for a restaurant generating $1m in sales in the shortest timespan. Marco adds: “We have been very well-received by Swiss customers and throughout 2018, we managed to open another three locations in each of the country’s language regions. What is more, we are now pursuing the ambitious task of growing to ten restaurants by the spring of 2020.”
Owing to a series of well-thought-out digital marketing campaigns in Denmark, as well as the launch of a delivery service and a distinctive focus on cooking high-quality chicken, KFC Germany saw appreciable growth in the Scandinavian land, doubling its system sales in the last 24 months. “Previously, we were known mainly as a brand of in-line restaurants based in the Copenhagen area, but we have now established a truly national presence by opening four free-standing drive-thrus in the cities of Aarhus, Herning, Vejle, and Greve,” notes Marco.
“On top of that, we have enjoyed continued growth in our domestic market in Germany. It might be interesting to mention that there are now KFC restaurants at more than ten train stations across the country since we started co-operating with Deutsche Bahn in 2011,” he goes on. “Germany also gave the KFC world the Filet Bites – 100 per cent chicken fillet pieces, hand-breaded with the Colonel’s secret recipe. As a whole, we are winning on best-tasting chicken and on customer experience. Visitors realise that our chicken is freshly-prepared and hand-breaded in our restaurant kitchens by excellent cooks, day in and day out. What is more, they always expect immaculate customer service, which our franchisees can repeatedly deliver, because each and every one of them displays an unwavering commitment to growing their respective business.”
Evidently, the franchise model adopted by KFC Germany has proven the most suitable for the German-speaking part of the world, including Denmark. Marco mentions a few more pivotal reasons for the business’ healthy development: “Among our franchisees, we have families that have operated a KFC restaurant for three generations. Such a continuation strengthens the focus on running great outlets further. In addition, we are very selective in recruiting the right franchisees. Every year, we receive over 2000 applications, but, normally, we give approval to no more than three of these. We maintain really high operating standards and compliance checks, while the final ingredient to our success has been the comprehensive people development programmes we run at all times.”
Growing a culture of employee engagement is viewed by Marco as key to proofing KFC Germany’s future. He details: “We have a range of programmes to develop an employee from a team member to shift leader, to restaurant leader, and then to an area coach. Our modules include lots of best practices, proven winning strategies and tactics to improve restaurant performance, industry know-how, required legal skills, and, most importantly, teaching our staff how to lead people. We are also especially proud of working with our partners from Heartstyles in coaching our restaurant leaders to ‘lead with heart’. We utilise Heartstyles’ game-changing character development programme that helps leaders become their best selves, and we are convinced that it is through such initiatives that we can cultivate the next generation of restaurant managers.”
Among KFC Germany’s priorities for 2019 is the conversion of an even higher number of Germans into chicken lovers to further increase the guest count per restaurant. With toothsome treats like the Zinger Burger, labelled ‘the best burger in the world’ by Marco (and his personal favourite), it should not feel like too much 75of an uphill struggle for the business to achieve this task, even though a harsh competitive environment.
“We are also looking to grow to more than 200 restaurants this year and take our turnover to over 300 million euros across Germany, Austria, Switzerland, and Denmark. Furthermore, we want to see a double-digit growth in system sales in all four countries,” Marco delineates his vision for 2019.
“Moving forward, we are looking to establish strong national brands in Switzerland, Denmark, and Austria, operating over 20 outlets in each of these countries within the next three to five years. Our ultimate ambition for the next decade, however, remains to become a billion-euro brand and run over 500 restaurants. We are hoping that in the next few years we will make meaningful progress towards realising this goal,” he concludes.