The founder and executive chairman of Competitive Foods Australia says reinvestment is key and he adheres to the fundamentals of a “people-first business”.
Jack Cowin, the billionaire founder and executive chairman of Competitive Foods Australia, said despite the recent upheaval caused by the COVID-19 pandemic, the fundamentals of the fast food industry have not changed over the past 50 years. Fast food chain.
“The food has to be hot, the drinks have to be cold and the service has to be with a smile,” added Cowin, one of Australia’s richest men with an estimated net worth of $3.2 billion, according to the Forbes list in Bangkok in November. Hold a global CEO meeting.
Hungry Jack’s is a franchise store of Burger King in Australia (the name Burger King has been registered as a trademark by a local restaurant). It is one of the largest fast food chains in Australia in terms of number of stores and revenue. Cowin is a chain store located in Australia. Developed from stores.
A Hungry Jack’s branch in Brisbane. The fast-food chain is owned by billionaire Jack Cowin’s Competitive Foods Australia.
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The chain bucks the trend of people spending less on eating out due to rising costs of living. Australia’s fast food and delivery industry has grown at an average annual rate of 1.3% over the past five years and is expected to reach $25.3 billion by 2024, according to global market research company IbisWorld. Competitive Foods’ revenue rose 18% to A$2.4 billion in the year to June 30 from the previous year, while net profit edged up to A$74.1 million, according to documents filed with the market regulator.
Still, the way the business is managed has changed, Cowin said. The shift to drive-thru and takeout, combined with rising construction costs and red tape, has resulted in store sizes shrinking by about 20% on average. “It’s a balancing act,” Cowin said, noting that costs must be passed on to maintain profitability, so the real challenge is growing sales.
“It’s mostly a people thing.”
He has been outspoken about rewarding employees for better performance with profit sharing. “This is primarily a people-based business,” he said (approximately 85 percent of Hungry Jack stores are company-owned, and 15 percent are owned and operated by independent franchisees). He later commented at the meeting that the principle was to look after the people who have the most contact with customers “because they are most likely to have the right impact on the business.” Hungry Jack’s store managers can now earn between $200,000 and $300,000 a year. Three times the average salary a year ago.
Cowin also recently increased his stake in Australian-listed Domino’s Pizza Enterprises, where he is chairman and largest shareholder, spending more than $28 million since the start of the year. He has previously discussed unlocking value from Domino’s’ largest franchisee outside the U.S., which operates more than 3,700 stores in 12 markets across Asia Pacific and Europe. Its shares have fallen 80% from an all-time high of A$165 per share in September 2021, partly due to aggressive expansion momentum and relatively flat sales growth in recent years.
Online sales for the year to June rose nearly 5 per cent from the previous year to A$4.2 billion, while underlying net profit after tax fell 2 per cent to US$120.4 million. As part of an efficiency overhaul, Domino’s Pizza Enterprises aims to close stores in Japan and France – where Cowin said there are “some issues” with stores – to shore up profits.
It’s also looking at managing overhead costs because, as Cowin noted, “When you do a good job, the costs are baked into the business.” He’s also rethinking how quickly stores can grow, noting 7,100 by 2033 Previous targets for Domino’s stores may take longer than expected.
Domino’s Pizza Enterprises, listed on the ASX, is Australia’s largest pizza chain (in terms of number of stores and online sales).
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He emphasized: “Our strategy is mainly about how to structure and how to reinvest existing resources.” “We’ve been successful because we’ve had more than 50 years to reinvest in the business.”
All of this is a nod to Cowin’s entrepreneurial years, when the Canadian raised C$300,000 (then $279,000) from 30 investors in his hometown after a holiday in Sydney in 1968. In 1969, at the age of 27, he returned to Western Australia and opened his first KFC outlet in Perth, before acquiring a Burger King franchise two years later.
It wasn’t until 2001 that Cowin was convinced to look further. The Australian dollar fell to an all-time low of 48 US cents, he recalled, “so I said, ‘Maybe we should diversify.'”
Over the next two decades, Competitive Foods invested in a series of businesses in North America and added domestic non-food interests, including holdings in Sydney harbor tourism operator BridgeClimb and Australian media company Ten Network Holdings. Cowen said some of the transactions were “in the hundreds of millions of dollars.”
“The first rule of business is don’t go bankrupt.”
Today, the privately held group has invested more than A$500 million ($325.4 million) in an overseas portfolio that includes Canadian restaurant group SIR Corp, Kansas City transport provider Railcrew Xpress and Houston-based construction safety and maintenance company Apache Industrial, where his investment strategy is: “How do I make you bigger, stronger and more dominant than you would be as a standalone company?” Cowin said that reflects the group’s broader approach.
Cowin, who sold the KFC franchise to Australian restaurant operator Collins Food for $56 million in 2013, said he had no plans to acquire another fast-food company. “Ultimately, our current position, which I don’t think will change, is that the best return for us is to continue to do more of what we’re already doing, rather than making acquisitions or getting into another brand,” he noted. Instead, Competitive Foods is looking for investments with synergies, including building a new $20 million factory in Brisbane for its global meat processing business, Consolidated Foods, which has a turnover of about $300 million.
The 82-year-old also has no plans to go public and has eschewed dividends in favor of conserving cash on hand for expansion. “The first thing in business is not to put yourself in a situation where if something goes wrong, you’re going to be eliminated,” Cowen said. “The first rule of business is don’t go bankrupt.”
