Pizza Hut Bangladesh Opens First International Chain Restaurant

Corporately known as Pizza Hut, Inc, it is a subsidiary of Yum! Brands, Inc. Pizza Hut, the first International Chain Restaurant in Bangladesh, opened its flagship restaurant in 2003 at Gulshan in Dhaka. From the day of its launching Pizza Hut remains the acknowledged leader of the Pizza Industry, evident from the continuous crowds the restaurant successfully draws in. Pizza Hut has over 15,000 outlets across 100 countries. Following its grand success in Dhaka, the Chittagong outlet was opened in September 2005 and later on in Cox’sbazar as well.

Transcom Foods Limited (TFL) started its journey in 2003 as a franchisee of Pizza Hut, the first International Chain Restaurant in Bangladesh, and went on to sign the contract to become the franchisee of Kentucky Fried Chicken (KFC) in the year 2006. Both Pizza Hut and KFC are subsidiaries of the world’s largest restaurant company Yum! Restaurants International. In a span of ten years, TFL has opened 5 Pizza Hut and 11 KFC outlets so far throughout the country.

Pizza Hut Franchise Information
• Initial Franchise Fee: $25,000 Total Investment: $1. 3M to $3M
• Net worth requirement: $1M
• Cash liquidity requirement: $360K
• Pay an annual 6. 5% royalty on your profit.
• Must commit to building at least 3 restaurants over 3 years
• Term of Franchise Agreement: 20 years Sources: http://en. wikipedia. org/wiki/Pizza_Hut http://www. pizzahut. com/ http://www. pizzahutfranchise. com/ http://www. startupbizhub. com/how-to-start-your-pizza-hut-franchising-business. htm http://www. startingfranchise. in/2012/11/Opening-Pizza-Hut-Franchise-India. html Menu of Pizza Hut Item Name |Price(Taka) |Item Name |Price(Taka) | |Pizza 2person |940 |Mushroom |450 | |Pizza 4person |1750 |Chicken Mushroom |500 | |Pizza 6person |2320 |Shrimp Mushroom |500 | |Pasta 2person |1050 |Garlic Bread |130 | |Pasta 4person |2080 |Garlic Bread platter |280 | |Arabiatta |400 |Spicy Garlic Mushroom |380 | |Chicken Arabitta |450 |Garden salad |200 | |Hawaiian salad |220 |Red n hot |1150/1500 | |Pasta mint salad |300 |Latin spicy hot, chicken Italia |1300/1650 | |Garden salad |200 |Hawaiian salad |220 | |Salad bar |400 |Cheese lover, veggie lover |250-1200 | |Onion rings |220 |Creamy spinach mushroom |500 | |Shrimp cocktail |280 |Spicy garlic mushroom |380 | |Potato shell with filler |300 |Bolognaise with meatball |450 | |Spanish delight |1150/1500 |Beef lover, BBQ chicken |300-1350 | |Garlic bread platter |280 |Beef Arabiatta |450 | |Veggie supreme |300-1350 |Chicken exotica, spicy beef 300-1350 | |Rustica |300-1350 |Chicken classic |380-1700 | |Seafood symphony |380-1700 |Latin Spicy hot |380-1700 |

More menus of Pizza Hut Beef LoverBBQ ChickenVeggie Lover Chicken Hawaiian Veggie SupremeChicken SupremeBeef Pepperoni Seafood Symphony Salads Breads Pasta [pic][pic] [pic][pic] [pic][pic] SWOT analysis of Pizza Hut Strengths:
• Innovative range of pizzas under one roof
• Part of the largest restaurant chain in the world Food attracts people of various ranges from young to old.

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• Over 18,000 franchises around the world
• Pizza Hut sits on top of global full-service restaurant tree
• Quick home delivery services.
• Sound financial situation and international turnover.
• Hygienic food and quick service.
• Famous television advertising
• They are ISO(International Standard Organization) Certified Weaknesses:
• High price for every menu.
• Franchise management.
• Loyal customers are feeling that the satisfaction of the pizzas is declining.
• There are complex computer systems and internal conflicts from franchisees.
• There is a lack of an organic pizzas, which will limit the target market. They are providing less range of products comparatively with high prices. They are more focused on Western taste instead of Eastern and Asian.
• Obviously, Pizza Hut is not the low cost producer. They rely on their quality pizza and good service to account for their higher prices
• Rising competition undermines Pizza Hut as consumers go for greater convenience
• Rising cheese costs threaten margins Opportunities:
• New Pizzas with different crust sizes and flavours.
• Pizza Hut expands Indian market menu and looks to old favourite to bolster sales.
• Diversification of new products can increase their market shares.
• Venture more into home delivery. Pizza hut can come up with the new products considering taste of people as like McDonalds
• They can reduce their prices because of more resources. Threats:
• Threat from Dominos pizza, also from Mc Donald’s who have tried to introduce a new meal that is a Pizza called: McPizza.
• Other local restaurants can affect their market share by providing pizzas with lower price.
• Bird flu.
• Health conscious people.
• Social factors can affect their image as a Western organization. [pic] Type: Subsidiary Industry: Fast food restaurant Founded: 1930 in North Corbin, Kentucky (original) 1952 at 3900 South State St, Salt Lake City, Utah (franchise) Founder(s): Harland Sanders

Headquarters:1441 Gardiner Lane, Louisville, Kentucky, United States (Operational Headquarters) 1209 North Orange St, Wilmington, Delaware, United States (Incorporation) Number of locations: 18,000 (2012) Key people: David C. Novak, Chairman and CEO of Yum! Brands Roger Eaton, Chairman and CEO of KFC Products: Fried chicken, chicken burgers (chicken sandwiches US), wraps, French fries, soft drinks, salads, desserts, breakfast Revenue: US$15 billion (2011) Parent Yum! Brands What made us great is still what makes us great. KFC Corporation, based in Louisville, Kentucky, is one of the few brands in America that can boast a rich, decades-long history of success and innovation.

It all started with one cook who created a soon-to-be world famous recipe more than 70 years ago, a list of secret herbs and spices scratched out on the back of the door to his kitchen. That cook was Colonel Harland Sanders of course, and now KFC is the world’s most popular chicken restaurant chain, specializing in that same Original Recipe, along with Extra Crispy chicken, home-style sides and buttermilk biscuits. There are more than 18,000 KFC outlets in 120 countries and territories around the world. Transcom Foods Limited (TFL) started its journey in 2003 as a franchisee of Pizza Hut, the first International Chain Restaurant in Bangladesh, and went on to sign the contract to become the franchisee of Kentucky Fried Chicken (KFC) in the year 2006.

Both Pizza Hut and KFC are subsidiaries of the world’s largest restaurant company Yum! Restaurants International. In a span of ten years, TFL has opened 5 Pizza Hut and 11 KFC outlets so far throughout the country. KFC Franchise Information
• Initial Franchise Fee: $45,000
• Total Investment: $1. 2M to $1. 8M
• Net Worth: $1. 5M to $2. 5M
• Liquid asset: $750,000
• Royalty Fee: 5%
• Advertising Fee: (Local 2. 5% of gross revenues & National Cooperative Advertising 4. 5% of gross revenues)
• Renewal Fee: $6,750
• Term of Agreement: 20 years Sources: 1) http://en. wikipedia. org/wiki/KFC 2) http://www. kfc. com/about/ 3) http://www. kfcfranchise. com/faqs-qsr-restaurant. hp 4) http://www. thefranchisemall. com/franchises/details/10004-0-kfc. htm 5) http://www. franchisedirect. com/foodfranchises/kfc-franchise-07095/ufoc/ Menu of KFC |Item Name |Price(Taka) |Item Name |Price(Taka) | |Chicken Snacker |100 |Potato Wedges |125 | |Chicken Snacker box |170 |Chicken rice meal |190 | |Strips Snack |190 Spicy Thai Chicken rice |300 | |Snack Box (1pic chicken & Fries) |170 |Hot Zinger meal |375/395 | |Popcorn Chicken |160 |Zinger meal |370/390 | |Boneless chicken strips |200/395 |Curry crunch chicken |290/575/1145/1700 | |Hot wings |150/290 |2pcs chicken fries meal |350 | |Bucket meal |2350 |Krushers |140/170/180/190/200 | |Bucket Hot& crispy |830/1250 |Desserts |80-150 | |Hot zinger |250 |Veggie zinger |210 | |Mixed rice |85 |Chicken zinger |240 | |Combo 1/2/3/4/5 |250/300/600/1200/999 |Burgers |240/250/210 | |Sides |30-125 |Packaged water |80-90 | |tea |50 |Coffee |60 | More menus of KFC: KrushersSoft DrinkGame Box Chicken BucketBox masterChicken Thali Veg FingerColeslawFriesSnack Box Corn on the cobSundae Soft Twirl Zing KongSnacker(chicken & veggie)Brownie Sundae SWOT analysis of KFC Strengths: Second best global brand in fast food industry in terms of value ($ 6 billion)
• KFC customer base remained loyal to the KFC brand because of its unique taste.
• World’s largest restaurant company in terms of system restaurants.
• Chicken — made with the same secret blend of 11 Ranks(herbs and spices highest among all chicken restaurant chains for its convenience.
• Menu variety and strong trademarks recipes.
• KFC has continued to dominate the dinner and take out segment of the Industry.
• Existing in the local market for years, therefore, knowing people’s tastes and whims.
• They are ISO (International Standard Organization) certified. Weaknesses: Losing market share as other Chicken chain increased sales at a faster rate.
• Lack of knowledge about their customers.
• Question of over franchising leads to loss of control and quality.
• Lack of focus on R&D.
• Unhealthy food menu
• High employee turnover
• Lack of strong marketing efforts
• The company has entered so many markets in the past in the United States that its growth rate was about only one percent an year.
• The company is said to not to pay attention to its resource and development. Opportunities:
• Introducing new products to its only chicken range.
• Introducing new services and technologies.
• Increasing demand for healthier food. With more investments the company can definitely make its position stronger in the food industry
• Home meal delivery.
• Employment opportunities for part time seeker especially for university goings.
•   Focusing on more nutrition’s. Threats:
• Bird flu
• Saturated fast food markets in the developed economies.
• Trend towards healthy eating.
• Local fast food restaurant chains.
• Government regulations.
• Change in tastes.
• Currency fluctuations.
• Lawsuits against KFC. [pic] Type: Public Traded as: SET: CPF Industry: Food and Beverage Founded: January 17, 1978 Headquarters: Bangkok, Thailand Key People: Adirek Sriratak, ( President & CEO) Products: Animal Feed, Animal Breeder, Meat and Food Parent: Charoen Pokphand Group

Charoen Pokphand Foods Public Company Limited is Thailand’s largest agribusiness firm. It is a publicly traded subsidiary of the Charoen Pokphand Group. Charoen Pokphand Foods Public Company Limited (CPF), a company of the CP Group, is the leading agro-industrial and food conglomerate in Thailand. The greater part of the Company production bases is in Thailand with some operating overseas. The Company’s core business lines are livestock and aquaculture. The livestock operations include chicken broiler, chicken layer, duck and swine. For aquaculture business, the two main marine animals are shrimp and fish. C. P. Bangladesh Company Ltd. is a sister concern of C. P. Group Thailand. C. P. Bangladesh Co. , Ltd. s incorporated in Bangladesh on 14th January 1999 doing business in the Agricultural industry, Poultry sector. Though C. P. Bangladesh Co. , Ltd is not in Bangladesh many years, but in this shorter period it has established its own Feed mills, Breeder Farm, Hatcheries, G. P. farm, fish feed mill all over the country. C. P. Bangladesh Co. , Ltd has established with a vision “To be a leader in Agro-business industry in Bangladesh” and each day it is getting closer to its vision. C. P. Bangladesh Co. , Ltd now produce Poultry feed (both layer and broiler), breeder feed, fish feed and cattle feed, and also animal health medicine. [pic] C. P. Bangladesh Co. Ltd. is a sister concern of C. P.

Group Thailand. C. P. Bangladesh Co. Ltd. is incorporated in Bangladesh on 14th January 1999 doing business in the Agricultural industry, Poultry sector. Though C. P. Bangladesh Co. Ltd. is not in Bangladesh many years, but in this shorter period it has established its own Feed mills, Breeder Farm, Hatcheries, G. P. farm, fish feed mill all over the country. They direct invested in Bangladesh by giving the tax to government (Ministry of commerce) without any licensing and franchising. They have established a production factory house in “Hemayetpur” and supply the materials for the fried chicken in the different branch in Dhaka and Chittagong. C. P.

Bangladesh Company Limited was established since 1998 under operation in Agro-Industrial and Food Business by dedication of providing high quality of animal feed mill, farming operation and also processing tasteful, nutritional and hygienic food products under branding of ‘‘FIVE STAR CHICKEN’’ that deliver to all customers in Bangladesh. It Started on April 7, 2008 with a mission- “Kitchen of Bangladesh. In Bangladesh they have started their fried chicken business through licensing with an amount of TK 250,000. Currently they are operating their fried chicken business across Bangladesh with their 201 branches among them 104 branches are in Dhaka. The Charoen Pokphand Group is the largest business conglomerate in Thailand. Its largest subsidiary is Charoen Pokphand Foods, which achieved 116. 5 billion baht in revenue in 2005, earning a profit of 6. 747 billion baht.

Apart from agribusiness, the family-owned conglomerate’s interests range from retailing, as the franchisee of Thailand’s 7-Eleven stores, to telecommunications, as the owner of True Corporation, a mobile telephone service provider, Internet service provider, and cable television company. CP Subsidiaries also include PRC registered Super Brand Mall Lotus center chain. The company has grown into a global business, with more than 250 subsidiaries in 20 countries, including China, where it is known as the Chia Tai Group. CP fried chicken’s methodologies of the business in Bangladesh are as follows:
• This is a Foreign Direct Investment (FDI).
• Operating as a licensing company in Bangladesh.
• Initial licensing Fee: TK 250,000
• Renewal Fees: Not disclosed. Sources: 1) http://www. cpfworldwide. com 2) http://en. wikipedia. org/wiki/Charoen_Pokphand_Foods 3) From Street corner retailers. Menu of CP fried chicken Item Name |Price (Tk) |Item Name |Price (Tk) | |Jumbo set |790 |Wing |60 | |Party set |460 |Happy hot Dog |60 | |Breast |115 |Masala chicken |55 | |Thigh |90 |Spicy chicken |50 | |Leg |60 |Chicken ball |25 | |Chicken sausage |25 |Hot wings |25 | SWOT analysis of CP fried chicken Strengths: Low price compare to KFC & Pizza Hut in Bangladesh.
• More branches than KFC & Pizza Hut in Bangladesh.
• More convenience than KFC & Pizza Hut in Bangladesh
• Horizontal raw material sources in Bangladesh.
• Sound financial situation and international turnover.
• Food attracts people of various ranges from young to old.
• Existing in the local market for years, therefore, knowing people’s tastes and whims. Weakness:
• Don’t have exclusive decorations compare to pizza Hut & KFC.
• Loyal customers are feeling that the satisfaction of the pizzas is declining.
• Lack of monitoring & controlling system.
• Lack of focus on R&D.
• Lack of strong marketing efforts. Lack of knowledge about their customers.
• Lack of menu varieties. Opportunities:
• They can reduce their prices because of their horizontal sources of raw materials.
• With more investments the company can definitely make its position stronger in the food industry
• Home meal delivery.
• They can attract more people with their consisting lower prices. Threats:
• Bird flu.
• Health conscious people.
• Local fast food restaurant chains.
• Government regulations.
• They need have more product offerings compare to KFC & Pizza Hut
• Their services should be improved. Franchising Franchising is the practice of using another firm’s successful business model.

The word ‘franchise’ is of Anglo-French derivation – from franc – meaning free, and is used both as a noun and as a (transitive) verb. For the franchisor, the franchise is an alternative to building ‘chain stores’ to distribute goods that avoids the investments and liability of a chain. The franchisor’s success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. Essentially, and in terms of distribution, the franchisor is a supplier who allows an operator, or a franchisee, to use the supplier’s trademark and distribute the supplier’s goods. In return, the operator pays the supplier a fee.

Thirty three countries, including the United States, and Australia, have laws that explicitly regulate franchising, with the majority of all other countries having laws which have a direct or indirect impact on franchising. Foreign Direct Investment :( FDI) According to the International Monetary Fund, foreign direct investment, commonly known as FDI, “… refers to an investment made to acquire lasting or long-term interest in enterprises operating outside of the economy of the investor. ” The investment is direct because the investor, which could be a foreign person, company or group of entities, is seeking to control, manage, or have significant influence over the foreign enterprise. Licensing:

Licensing is the process of leasing a legally protected (that is, trademarked or copyrighted) entity – a name, likeness, logo, trademark, graphic design, slogan, signature, character, or a combination of several of these elements. The entity, known as the property or intellectual property, is then used in conjunction with a product. Many major companies and the media consider licensing a significant marketing tool. Interpretations of our analysis Yummy! Let’s go for Pizza Hut or KFC or CP. Yes, these words are becoming very common for city people in Bangladesh. What more can somebody ask for! In the context of Bangladesh, whenever we talk about party or to hang around with friends or families in many cases Pizza Hut or KFC or CP gets priority among all other choices we have.

Though their food items are little bit more expensive than our traditional foods, but still we love it. This time we are not having any of their food items, we are just going to have an analysis of these three companies. For the purpose of our analysis, we had to gather information’s both from the primary and secondary sources. Collecting information’s from the secondary sources were easy compare to primary sources. While we went to collect raw data from the primary sources, we found the managers of those restaurants very uncomfortable of sharing any information’s and that made our journey very difficult. After being refused from them, we went to their corporate offices but still got denied.

Since we had to complete our analysis, somehow we did manage some of the information’s about these companies and which we believe can be helpful for concluding our analysis. From the information’s we have found, both Pizza Hut & KFC were originated from U. S. A, and currently Transcom Foods Limited (TFL) had brought both Pizza Hut & KFC into Bangladesh though franchising and off-course with the help of world’s largest restaurant company named “Yum! Restaurants International” It’s kind of revolution for the food industry in our country. Transcom Foods Limited (TFL) started its journey in 2003 as a franchisee of Pizza Hut, the first International Chain Restaurant in Bangladesh, and went on to sign the contract to become the franchisee of Kentucky Fried Chicken (KFC) in the year 2006. In a span of ten years, TFL has opened 5 Pizza Hut and 11 KFC outlets so far throughout the country. Very surprisingly their popularity is increasing in our country day by day even though their product offerings are different. The way they are dominating the world’s restaurant industry through their product and service offerings, similarly they are dominating in our country as well. Most of the time, they are trying to reach the higher income people. Whereas CP (Charoen Pokphand) is another food company which has targeted all classes of people in our country. Basically CP has originated from Thailand and started it’s business in our country as an agro based industry.

But later on, in the year of 2008, they had expanded their business in food industry through licensing. In Bangladesh they have started their fried chicken business through licensing with an amount of TK 250,000. Currently they are operating their fried chicken business across Bangladesh with their 201 branches among them 104 branches are in Dhaka. Even though they are having more branches compare to Pizza Hut & KFC, but their product offerings and service quality especially, their locations and the environments are not that good like Pizza Hut & KFC. Their internal and external decoration is also different and looks less exclusive than Pizza Hut & KFC. But CP’s food prices are way cheaper than Pizza Hut & KFC.

Moreover, CP’s initial investments and expenses are less than Pizza Hut & KFC. From the above mentioned analysis, we can say that, both Pizza Hut & KFC are fulfilling peoples demand by assuring their product & service qualities as well as environments whereas, CP is not covering any of those issues rather they are more focusing on cheaper product price. Price Comparison with other countries: |Item Name |Bangladesh |India |U. S. A | |KFC 8 pcs Bucket |Tk 830. 00 |Rs 350. 00 |$ 10. 9 | | | |350*1. 25=Tk 437. 5 |10. 99*76. 54=Tk 841. 17 | |KFC 12 pcs Bucket |Tk 1,250. 00 |Rs 500. 00 |$ 16. 49 | | | |500*1. 25=Tk 625. 00 |16. 49*76. 54=Tk 1,262. 14 | |Pizza Hut |Tk 460. 00 |Rs 315. 00 |$ 7 | |Classic Margherita(M) | |315*1. 25= Tk 393. 75 |7*76. 54= Tk 535. 8 | |Pizza Hut |Tk 1200. 00 |Rs 490. 00 |$ 11. 99 | |Veggie Lovers | |490*1. 25= Tk 612. 5 |11. 99*76. 54= Tk 917. 71 | |CP |Tk 790. 00 |Rs 290. 00 | | |Jumbo Set | |290*1. 25= Tk 362. 5 | | Comparative analysis of these three companies: Company Franchising Cost |Licensing Cost |Initial Investment |Location |Loyalty |Popularity |Product Price |Service |Customer Level | |Pizza Hut | High |N/A |Very High |Moderate |Very High |High |Very High |Excellent |High & upper middle | |KFC |Very High |N/A |Very High |Moderate |Very High |Very High |High |Excellent |High, upper middle & middle | |CP |N/A |Low |Moderate |Excellent |Moderate |Moderate |Moderate |Low |Middle & low | | Company |Product quality |Product Variety |Product offerings |Availability |Home delivery |Inspection |Environment |Customer Satisfaction | |Pizza Hut |Excellent |Various |Active |Very Few |Yes |Frequent |Excellent |Very Good | |KFC |Excellent |Various |Very active |Few |Yes |Frequent |Excellent |Very good | |CP |Good |Limited |Stable |Available |N/A |Les Frequent |Moderate |Good | |