Competitive Foods Australia

Competitive Foods Australia Pty Ltd (CFA) is the largest franchiser of restaurants in Australia. It is owned and operated by Jack Cowin. Its units include Hungry Jack's & KFC.

Holdings

CFA currently operates at least four different restaurant brands.

Hungry Jacks

Main article: Hungry Jack's

Hungry Jack's, sometimes colloquially abbreviated to HJ's, is the exclusive Australian master franchisee of Burger King Corporation. With over 300 locations in the country, HJ's is the second largest franchisee of Burger King in the world.

When Burger King decided to expand its operations into Australia, it found that its business name was already trademarked by a man running a small takeaway food shop in Adelaide. Thus, BK was forced to change the name when it decided to open stores in the country - the only time this has happened in its corporate history. Burger King provided the Australian franchisee, Jack Cowin, with a list of possible alternative names that the Australian Burger King restaurants could be branded as. The names were derived from pre-existing trademarks already registered by Burger King and its then corporate parent Pillsbury. Cowin selected the "Hungry Jack" brand name, one of Pillsbury's US pancake mixture products, and slightly changing the name to a possessive form by adding an apostrophe 's' thus forming the new name Hungry Jack's. Accordingly, the first Australian franchise of the Burger King Corporation, established in Perth in 1971, was branded as Hungry Jack's.[1]

Hungry Jack's currently owns and operates or sub-licenses all of the Hungry Jack's and Burger King restaurants in Australia. As the master franchise for the continent, the company is responsible for licensing new operators, opening its own stores and performing standards oversight of franchised locations in Australia.

KFC

Main article: KFC

Burger King Corporation v Hungry Jack's

([2001] NSWCA 187)

In 1991, Hungry Jack's Pty Limited renewed its franchise agreement with Burger King Corporation which allowed the Hungry Jack's to license third party franchisee, however one of the conditions of the agreement was that Hungry Jack's had to open a certain number of stores each year for the term of the contract. In 1996, shortly after the Australian trademark on the Burger King name lapsed, BKC made a claim that Hungry Jack's had violated the conditions of the renewed franchise agreement by failing to the expand the chain at the rate defined in the contract and sought to terminate the agreement. Under the aegis of this claim, Burger King Corporation in partnership with Royal Dutch Shell's Australian division Shell Company of Australia Ltd., began to open its own stores in 1997 beginning in Sydney and throughout the Australian regions of New South Wales, Australian Capital Territory and Victoria.[2][3][4] Additionally, BKC sought to limit HJ's ability to open new locations in the country, whether they were corporate locations or third-party licensees.[5]

As a result of Burger King's actions, Hungry Jack's owner Jack Cowin and his company Competitive Foods Australia, began legal proceedings in 2001 against the Burger King Corporation claiming BKC had violated the conditions of the master franchising agreement and was in breach of the contract. The Supreme Court of New South Wales agreed with Cowin and determined that BKC had violated the terms of the contract and awarded Hungry Jack's A$46.9 million.[6] In its decision, the Court said that Burger King sought to engineer a default of the franchise agreement so that the company could limit the number of new Hungry Jack’s branded restaurants and ultimately claim the Australian market as its own, which was a purpose that was extraneous to the agreement.[5][7]

After BKC lost the case, it decided to terminate its business in the country and sold its operations and assets to its New Zealand franchise group, Trans-Pacific Foods (TPF). The terms of the sale had TPF assume oversight of the Burger King franchises in the region as the Burger King brand's master franchisee. TPF administered the chain's 81 locations until September 2003 when the new management team of BKC reached an agreement with Hungry Jack's Pty to re-brand the existing Burger King locations to Hungry Jack's and make HJP the sole master franchisee of both brands. An additional part of the agreement required BKC to provide administrative and advertising support as to ensure a common marketing scheme for the company and its products.[8] TPF transferred its control of the BK franchises to HJP, which subsequently renamed the majority of the remaining BK locations as Hungry Jack's.[3][9] While HJP is now the exclusive master franchisee for Burger King in Australia and has the right to allow new Burger King locations in the country, no new locations have opened and only a small handful of BK restaurants remain in New South Wales.

For more details on this topic, see Hungry Jack's.

KFC & CFA

In October, 2007 a similar issue arose between KFC parent Yum! Brands and CFA over Yum's refusal to renew the franchise agreement in Western Australia. Yum was reported to have made an offer to CFA for the properties that was below market value, which CFA refused.[10] The issue has drawn a large amount of scrutiny in the local press and inspired local Labor MP Paul Papalia has called upon the Western Australia and Australian Federal governments to launch inquiries on the issue.[11]

References

  1. ↑ Restaurant Business News (30 May 2003). "Burger King Re-flags Australian Stores". AllBusiness.com. Retrieved 2007-09-29.
  2. ↑ Alina Matas (11 November 1999). "Burger King Hit With Whopper ($44.6 Million) Of A Judgment". Zargo Einhorn Salkowski & Brito. P.A. Retrieved 2007-09-29.
  3. 1 2 "In Australia, Burger King to become 'Hungry Jack's'". South Florida Business Journal,. 30 May 2003. Retrieved 2007-09-29.
  4. ↑ BKC press release (6 November 1998). "Burger King Corporation Announces The Opening Of The Company's 10,000th Restaurant". PR Newswire. Retrieved 2008-03-08. Burger King Corporation announced today that it is opening its 10,000th restaurant in Australia on Saturday, November 7, a major milestone in the fast-food giant's development plans.
  5. 1 2 Rani Mina. "A Franchiser's Duty of Good Faith and Fair Dealing". Findlaw Australia. Retrieved 2008-03-08.
  6. ↑ [2001] NSWCA 187
  7. ↑ [2001] HCATrans S157/1
  8. ↑ The Gale Group (9 June 2003). "Hungry Jack's to replace BK brand in Australia". Nations Restaurant News. Retrieved 2008-03-08. "Consolidation means more money for marketing and will create a powerful, single brand with an increased focus on operations excellence that should add to growth in profitability," Brad Blum, chief executive of Miami-based Burger King, said.
  9. ↑ AP Wire (13 September 2003). "Burger King slips into Hungry Jacks uniform". the Sydney Morning Herald. Retrieved 2008-03-08. Burger King Corp's new management said on Friday it was ceding the Australian market to the Hungry Jack's brand, dissolving a convoluted relationship that at one time went to court in a franchising dispute.
  10. ↑ KFC franchisees face losing licenses DANIEL EMERSON, the West Australian
  11. ↑ Jack Cowin inspires WA franchise inquiry
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