Find out how a popular South Korean chain is winning in Australia's high cost environment

QSR Media got in touch with Richard Godwin, Master Franchisor for NeNe Chicken, to talk about the brand's journey in Australia, and its challenges in finding a foothold in a high cost country.

NeNe Chicken was established in South Korea in 1999 and currently has over 1,000 outlets throughout South Korea. The brand opened its first outlet in May 2015 in Melbourne Central, and it quickly expanded to 11 outlets across the country in 18 months.

QSR Media: Can you tell us more about NeNe Chicken? What differentiates your brand in the market?

NeNe Chicken operates based on quality, not on price. As a franchisee with a smaller national franchisee footprint, NeNe cannot compete based on being the lowest cost operators. Instead NeNe focuses on brand quality and excitement. Our brand promise 'exciting food served for life', reflects this.

Our focus is on serving fried chicken that connects with the five senses to create the full 'NeNe Experience'. This is incredibly important to achieve ultimate customer satisfaction and maintain their excitement in the brand. As follows:

• For Sight: bright, inviting outlets.
• Smell: the marinate and sauce coatings
• Sound: the crunch of the batter mix
• Touch: the texture of the fried chicken
• Taste: Every sense up to this point is reaffirmed as the customer 'tastes' the full suite of senses

Our fried chicken has 3 unique factors that differentiate our product from our competitors:

1. The marinate: the chicken is marinated for a period of 16 hours before being delivered to the franchisee outlet. All chicken is fresh, never frozen. The marinate increases the juiciness of the chicken and delivers a mild peppery sensation to the taste buds.
2. The batter mix: NeNe batter mix is uniquely formulated, to fry the chicken, leaving it crispy on the outside, yet leaving the chicken meat juicy, but not oily on the inside.
3. NeNe's authentic sauce coatings. Apart from offering our original fried chicken NeNe also offers a broad range of sauces that coat the chicken. These sauces are imported directly from NeNe Chicken Korea. The variety of sauces maintains brand excitement.

I believe there is also a key differential to our franchise system, with our genuine desire for our franchisees to feel that they are part of the NeNe family, that we all succeed together. That our franchise system is not 'corporatized' in so far as there is not a strategic goal to maximise sales at the cost of the franchisees businesses. To us this is a great concern within the franchise industry, whereby franchisee margins are eroded under the pursuit of system sales. Our dual focus is on customers enjoying the NeNe experience and our franchisees operating a successful business. These two goals are mutually inclusive, not exclusive. One cannot exist without the other.

QSR Media: Any big plans for the year?

NeNe Chicken would like to expand into the Sydney market in 2017. Sydney represents an incredible opportunity with both the largest population and the highest average spending in Australia. We are also excited about new sauce flavours that will be launched throughout 2017 to maintain customer excitement with the brand.

QSR Media: What can you say are the challenges you are currently facing in the industry? Opportunities?

The QSR industry is very competitive in Australia. There are numerous operators all trying to attract the customers attention. To compete, NeNe Chicken maintains its focus on its brand promise: 'exciting food served for life'.

Australia is a high cost country, yet QSR price inflation is minimal. NeNe Chicken assists its franchisees through continuous productivity improvements, and through reducing product costing. As our network of franchisees increases, our bargaining power with suppliers increase. This enables us to seek greater pricing discounts which are passed onto the franchisees.

We find opportunities in the broad customer appeal to our product: Australians have a traditional love affair with fried chicken. NeNe Chicken provides opportunity to experience a whole new range of fried chicken. We also take advantage of our brand infancy. This presents franchisees with the opportunity to secure prime locations with the highest potential . As the brand matures, prime locations have already been taken, and secondary locations need to be found.