The Hungry Jack’s founder is unfazed by US burger chain Wendy’s foray into Australia - he’s seen exactly what happened the last time it tried to expand Down Under.
, Wendy’s, after starting in Ohio in 1969, had tried since 1982 to establish itself in Melbourne. Set up by one of its major US franchisors, the Tennessee-based Johnston Southern Corporation, Wendy’s’ first Australian push was also backed by a group of Melbourne businessmen that included Western Mining Corporation chief Hugh Morgan.
However, the enterprise collapsed in 1985 with debts of $8 million. Cowin bought all 11 Wendy’s stores for the bargain price of $2 million, closed two outlets and converted the remaining nine to Hungry Jack’s stores.“A lot of these companies come in thinking Australia is the 51st state of the US because we speak the same language,” he said.
“They don’t realise that labour rates in our industry here are well over $20 an hour, where it’s still $7.25 an hour in the US, so that’s a big adjustment, and the property prices for [restaurant] uses are considerably higher here too.” Wendy’s in the 1980s had wanted for a true point of difference with the burger industry’s “big two”, Cowin said, and argued that was still the case.that the franchise differentiated itself with a food preparation policy of “made-to-order only”, and did not use heating lamps. Wendy’s also prominently advertises that its beef is “fresh never frozen”, a claim that McDonald’s and Burger King “just can’t make”, according to its promotional materials.
With all three of the burger giants’ menus broadly similar – they each offer a triple-patty option, for instance – Cowin said Wendy’s and its master franchisor would need to rely on advertising to win market share.
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