Half of Restaurant Brands New Zealand's 4000-strong workforce is set to walk off the job tomorrow after negotiations for a new collective agreement broke down.

About 2000 Unite Union members will picket selected KFC stores in Auckland, Rotorua, Palmerston North, Wellington, Christchurch and Dunedin at lunch time on Saturday in an effort to twist the company's arm over disputed pay and conditions.

Restaurant Brands operates New Zealand's KFC, Pizza Hut, Carl's Jr and Starbucks Coffee franchises and has branched out to Australian KFC stores and Taco Bell and Pizza Hut businesses in Hawaii.

Unite national director Mike Treen told BusinessDesk his members haven't had a strike at Restaurant Brands since 2006, and that the company has previously set the benchmark in the fast-food sector, being the first to sign a collective agreement, ditch youth rates, reward staff loyalty with a stepped pay hike, and moved to a fixed-shift system after the zero hours change.


"In the past, they have been the first to move in a positive direction," Treen said.

"They're adopting a position which is going to put them behind McDonald's which we can't allow. McDonald's is normally the difficult one."

Treen said tomorrow's strike is the start, but that "what they are trying to achieve is simply unacceptable to the workers and if we have to fight them for months, we will fight them for months".

One of the disputed issues is Unite's push for an annual wage increase of 10 cents an hour for three years for Restaurant Brands' lowest paid workers taking their wage to 30 cents above the minimum wage by 2019, something McDonald's has already committed to, whereas Restaurant Brands has offered just one 10-cent increase over three years.

"We've welcomed it with McDonald's because it establishes the principle that they're no longer a minimum wage employer," he said.

"It's silly of Restaurant Brands to pick a fight with us over these issues because they're actually hugely profitable at the moment."

Restaurant Brands on Thursday reported a 7.8 per cent increase in annual profit as record sales at its New Zealand KFC stores and the acquisition of a KFC franchise across the Tasman bolstered earnings.

The company noted rising labour costs as squeezing margins, and its wage bill rose 25 per cent to $130.7m in the year, lagging behind a 28 per cent increase in revenue to $497.2m. The company's wage bill equated to 26.3 per cent of revenue in the 52 weeks ended February 27, down from 26.9 per cent a year earlier.

Other sticking points include lifting shift supervisors' pay to a living wage, provisions for redundancy pay, overtime allowances, ensuring existing staff get offered new or changed shifts when they come up, break times, and health and safety representatives.

Restaurant Brands said in a statement it was disappointed that strike action would be going ahead.

"Of the major employers in the fast food sector, Restaurant Brands already leads the sector for fixed hours of work and security of pay," the company said.

"The Consumer Price Index has risen between 5 per cent and 6 per cent since 2012; in that time Restaurant Brands has increased wage rates by 17 per cent."

Restaurant Brands Group CEO, Russel Creedy said Restaurant Brands was the first in the fast food sector to scrap zero hour contracts to guarantee minimum hours for staff and to proactively negotiate permanent days and hours of work for all staff.

"The overall package of terms and conditions of our employees is better than our competitors in the sector and includes a faster pathway for new employees to increase their pay rates.

"We are an important first job opportunity for many of our employees, so it's disappointing that the Union has rejected our offer to pay entry level positions above the Adult Minimum Wage, from day one."

The company's shares fell 0.6 per cent to $5.22, having gained 3.4 per cent so far this year.