Carl's Jr eyes up Henderson and Manukau

EXPANSION COST: Carl's Jr expects to invest $4.5 million in each new outlet. Photo / Sarah Ivey

Henderson, Manukau, Pukekohe, Rotorua, Tauranga and Hamilton are in the sights of American fast-food restaurant chain Carl's Jr in a $120 million New Zealand expansion drive.

Ian Letele, a New Zealander of Samoan descent who is Carl's Jr's Singapore-based Asia Pacific vice-president, was this week searching for properties as part of plans for 30 outlets.

"We're looking at Pukekohe, Lincoln Rd and Manukau. They're still deals under discussion. I was down in Rotorua, Tauranga and Hamilton on the weekend," he said, citing Tainui's big Hamilton mall, The Base, as drawing his attention.

Each restaurant was a $3 million to $4.5 million investment, he said, giving an indicative business plan that franchisees spend $120 million.

But Letele expressed frustration at the chain being called one of the world's worst, particularly for a notorious foot-long cheeseburger with twice as many calories as KFC's Double Down.

"A lot of the media talked up the foot-long hotdog which was never launched. But it was helpful to us because people became curious about the menu," he said, stressing that the chain was aimed at adults, offering a balance of food which included tomato, onion, guacamole and mushrooms.

Letele said he knew of the dangers of obesity: "Moderation is the key - I have aunties and uncles who are overeating."

The chain seeks sites of 1700sq m to 2000sq m, restaurants of up to 300sq m and parking for 20 to 25 vehicles. Carl's Jr will soon open a drive-through in Avondale on an empty site at the intersection of Wingate St, St Jude St and Great North Rd.

"It's a new build and will be open around April or May. It will be a lease situation, developed by a developer who will either sell it on or hold on to it themselves as part of a portfolio. The predominant model in New Zealand will be drive-through as a priority which provides the largest volumes," Letele said, although the chain would also consider being within larger shopping centres.

The chain is not working with any particular real estate agents but Letele expects to double the number of Auckland outlets soon and for the business to have up to five restaurants later this year.

Men aged 18 to 35 were the target, although customer gender numbers were equally split, he said.

Stores in the United States turn over around US$1.5 million ($1.8 million) annually on average. New Zealand's fast-food sector had revenue of around $1.7 billion, Letele said.

Debate about the chain is strong in Avondale with Duncan Macdonald, chairman of the Avondale Business Association and deputy chairman of the Whau local board, backing Carl's Jr but board chairman Derek Battersby saying the US chain had targeted low socio-economic areas by opening in Takanini and Glen Innes.