Former All Black cashes in on Carl's Jr sale

Former All Black Michael Jones is selling his stake of Carl's Jr burger stores to Restaurant Brands. Photos / File

Restaurant Brands' purchase of seven Carl's Jr stores part-owned by former All Black Michael Jones will help provide the "critical mass" New Zealand's biggest fast-food operator needs to turn the American burger chain into a more profitable business unit, says a fund manager.

The NZX-listed company has agreed to buy the Auckland-based outlets from Forsgren NZ for $10.5 million, making it the sole operator of the brand in this country.

The acquisition takes Restaurant Brands' total number of Carl's Jr stores to 16.

Forsgren is 10 per cent owned by Jones and his wife, Maliena, with the balance held by members of the Forsgren family including the ex-All Black's brother-in-law Barry Forsgren, who introduced Carl's Jr to New Zealand in July 2011 when the first store opened in Auckland's Takanini.

Restaurant Brands became the second local operator of Carl's Jr in November 2012 when it added the brand to its existing stable - KFC, Pizza Hut and Starbucks.

Its newest brand provided a product range it could use to better compete against rivals McDonald's and Burger King.

Restaurant Brands is eyeing the potential to open up to 60 Carl's Jr stores in New Zealand.

Salt Funds Management managing director Matt Goodson said Forsgren and Restaurant Brands had lacked scale with Carl's Jr, so combining all the stores under a single operator was a positive development.

WATCH: England gunning for All Blacks

"What this will allow is one party to have critical mass to spread marketing costs and get the supply chain well and truly sorted," Goodson said. "It should hopefully work very well for them."

He said Carl's Jr had the potential to become "exceptionally profitable" for Restaurant Brands once suitable scale was achieved.

Carl's Jr turned a $100,000 profit for Restaurant Brands in the first half of its financial year compared with a $200,000 loss a year earlier. Carl's Jr's half-year sales rose 34 per cent to $8.8 million.

Barry Forsgren said his family would have liked to expand Carl's Jr further in New Zealand, but Restaurant Brands' arrival on the scene had "put an end" to those plans.

Forsgren only had the rights to operate up to eight stores in this country.

"We decided it was the right time to move on to different things," said Forsgren, who also operates a Carl's Jr franchise in American Samoa.

The sale is slated for completion this month, pending the approval of US-based franchiser CKE Restaurants Holdings.

Restaurant Brands said it would offer employment to existing Forsgren employees.

Separately, Restaurant Brands has signed a master licensing agreement with CKE which will allow Restaurant Brands to sublicense Carl's Jr stores in New Zealand to third-party franchisees.

"Licensing smaller franchisees to operate the Carl's Jr brand in locations where they can operate the business effectively will allow more rapid expansion of the Carl's Jr store network," said Restaurant Brands chief executive Russel Creedy.

The company operates a similar model with its other brands, receiving a share of royalties and fees in return for the development and supervision of sublicensed stores.

Restaurant Brands shares closed up 0.69 per cent yesterday at $3.65.

- additional reporting BusinessDesk