A Study on Franchising(KFC)

PROJECT REPORT
Submitted in Partial Fulfillment of the Requirement Of Higher Secondary Education

BY RAHUL BURAD.D XI G1

COMMERCE DEPARMENT CHETTINAD VIDYASHRAM R.A. PURAM CHENNAI 600 028

FEBRUARY 2012

INDEX I. Chapter 1 1. Introduction 2. Objectives 3. Methodology II. Chapter 2 1. KFC III. Chapter 3 1.Trend analysis 2.Conclusion 3.Bibilography

CHAPTER 1
INTRODUCTION
Error! Bookmark not defined.Franchising allows people to go into business for themselves, not by themselves Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation from franc - meaning free, and is used both as a noun and as a (transitive) verb.[1] For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid the need for investments and liability for a chain. The franchisor's success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. Thirty three countries, including the United States, China, and Australia, have laws that explicitly regulate franchising, with the majority of all other countries having laws which have a direct or indirect impact on franchising

IMPORTANCE
Its been my experience that franchisees tend to focus more on the size of their prospective territory rather than on other factors. Territory size is a compelling topic in franchising. Many franchisees are under the misconception that the larger the territory the more insulated they will be from fellow franchisees and the greater the potential for added growth. The franchise territory represents the foundation of the business. With few exceptions, its where your customers, revenues and future growth will come from. If the territory is too small it can make growing sales more difficult. It could also allow for a fellow franchisee on the border of your territory, to vie for customers in your territory. Large territories can be difficult to develop and may require added resources. Some franchisors have performance requirements in their franchise agreement that differ depending upon the size of the territory.

When you and your attorney review the Franchise Disclosure Document focus on how the territory is defined and what rights are held by the franchisee and franchisor.

OBJECTIVES
A recognised brand name. Enhanced business image. Consistent quality. Franchises offer important pre-opening support: site selection design and construction financing (in some cases) training grand-opening program Franchises offer ongoing support training national and regional advertising operating procedures and operational assistance supervision and management support increased spending power, access to bulk purchasing and economies of scale.

METHODOLOGY

This information is a secondary source of information. This was collected Wikipedia,google,altavista. This secondary information was very helpful to come up with this project.

CHAPTER 2
KFC

History

The first KFC restaurant, situated in South Salt Lake, Utah and since replaced by a new KFC on the same site Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime.[2] Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named Sanders Court & Caf and was so successful that in 1935 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street.[3] When Sanders prepared his chicken in his original restaurant in North Corbin, he prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation. In 1939, Sanders altered the cooking process for his fried chicken to use a pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying.[4] In 1940 Sanders devised what came to be known as his Original Recipe.[5] The Sanders Court & Caf generally served travelers, often those headed to Florida, so when the route planned in the 1950s for what would becomeInterstate 75 bypassed Corbin, he sold his properties and traveled the U.S. to sell his chicken to restaurant owners. The first to take him up on the offer wasPete Harman in South Salt Lake, Utah; together, they opened the first "Kentucky Fried Chicken" outlet in 1952.[6] By the early 1960s, Kentucky Fried Chicken was sold in over 600 franchised outlets in both

the United States and Canada. One of the longest-lived franchisees of the older Col. Sanders' chicken concept, as opposed to the KFC chain, was the Kenny Kings chain. The company owned many Northern Ohio diner-style restaurants, the last of which closed in 2004. Sanders sold the entire KFC franchising operation in 1964 for $2million USD, equal to $14,987,124 today.[7] Since that time, the chain has been sold three more times: to Heublein in 1971, to R.J. Reynolds in 1982 and most recently to PepsiCo in 1986, which made it part of its Tricon Global Restaurantsdivision, which in turn was spun off in 1997, and has now been renamed to Yum! Brands. In 2001, KFC started tests in Austin, Texas restaurants of "Wing Works" chicken wing line sold with one of a few flavored sauces. Also, KFC hired a consultant to develop a breakfast menu.[8] Additionally, Colonel Sanders' nephew, Lee Cummings, took his own Kentucky Fried Chicken franchises (and a chicken recipe of his own) and converted them to his own "spin-off" restaurant chain, Lee's Famous Recipe Chicken. Recipe The recipe of 11 herbs and spices used by KFC in preparation of their chicken remains a trade secret.[9][10] Portions of the secret spice mix are made at different locations in the United States, and the only complete, handwritten copy of the recipe is kept in a vault in corporate headquarters.[11] On September 9, 2008, the one complete copy was temporarily moved to an undisclosed location under extremely tight security while KFC revamped the security at its headquarters. Before the move, KFC disclosed[12] that the recipe, which includes exact amounts of each component, is written in pencil on a single sheet of notebook paper and signed by Sanders.[13] It was locked in a filing cabinet with two separate combination locks. The cabinet also included vials of each of the 11 herbs and spices used. Only two unnamed executives had access to the recipe at any one time.[14] One of the two executives said that no one had come close to guessing the contents of the secret recipe, and added that the actual recipe would include some surprises. On

February 9, 2009, the secret recipe returned to KFC's Louisville headquarters in a more secure, computerized vault[15] guarded by motion detectors and security cameras. Reportedly, the paper has yellowed and the handwriting is now faint.[13] In 1983, writer William Poundstone examined the recipe in his book Big Secrets. He reviewed Sanders' patent application, and advertised in college newspapers for present or former employees willing to share their knowledge.[16] From the former he deduced that Sanders had diverged from other common fried-chicken recipes by varying the amount of oil used with the amount of chicken being cooked, and starting the cooking at a higher temperature (about 400 F (200 C)) for the first minute or so and then lowering it to 250 F (120 C) for the remainder of the cooking time. Several of Poundstone's contacts also provided samples of the seasoning mix, and a food lab found that it consisted solely of sugar, flour, salt, black pepper and monosodium glutamate (MSG). He concluded that it was entirely possible that, in the years since Sanders sold the chain, later owners had begun skimping on the recipe to save costs.[17][18][19] Following his buyout in 1964, Colonel Sanders himself expressed anger at such changes, saying: That friggin' ... outfit .... They prostituted every goddamn thing I had. I had the greatest gravy in the world and those sons of bitches-- they dragged it out and extended it and watered it down that I'm so goddamn mad![18][19] Ron Douglas, author of the book America's Most Wanted Recipes, also claims to have figured out KFC's secret recipe.[20] Products

Packaging
The famous paper bucket that KFC uses for its larger sized orders of chicken and has come to signify the company was originally created by Wendy's restaurants founder Dave Thomas. Thomas was originally a franchisee of the original Kentucky Fried Chicken and operated several outlets in the Columbus, Ohio area. His reasoning behind using the paper packaging was that it helped keep the chicken crisp by wicking away excess moisture. Thomas was also responsible for the creation of the famous rotating bucket sign that came to be used at most KFC locations in the US. [21]

Menu items Chicken

KFC's specialty is fried chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken made with the original recipe. The other chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine. Kentucky Grilled Chicken This marinated grilled chicken is targeted towards health-conscious customers. It features marinated breasts, thighs, drumsticks, and wings that are coated with seasonings before being grilled. It has less fat, calories, and sodium than the Original Recipe fried chicken.[22] Introduced in April 2009 and was adapted mid-2011 in the UK as the "Brazer".

KFC has two lines of burgers or sandwiches: its "regular" chicken sandwiches/burgers and its Snackers line. The regular sandwiches/burgers are served on either a sesame seed or corn dusted roll and are made from either whole breast fillets (fried or roasted), chopped chicken in a sauce or fried chicken strips. The Snackers line are cheaper items that consist of chicken strips and various toppings. These are known as "burgers" in most countries and "sandwiches" in the United States. There is the chicken fillet burger (a chicken breast fillet coated in an original-recipe coating with salad garnish and mayonnaise) and a Zinger Burger (as with the former but with a spicier coating and salsa). Both of these are available as "tower" variants in some locations, which include a slice of cheese and a hash brown.

KFC considers its Double Down product a sandwich or burger in spite of containing no bread.

A variety of finger foods, including chicken strips, wings, nuggets, and popcorn chicken, and potato wedges, are served with various sauces.

Several pies have been made available from KFC in some locations. The Pot Pie is a savory pie made with chicken, gravy and vegetables. In the second quarter of 2006, KFC introduced its variation on Shepherd's pie called the Famous

Bowl, known simply as the Chicken Bowl outside the US. Served in a plastic bowl, it is layered with mashed potatoes or rice, gravy, corn, popcorn chicken, and cheese, and is served with a biscuit. The bowl had been available at KFC's special test market store in Louisville since the third quarter of 2005.

The KFC Twister is a wrap that consists of either chicken strips or roasted chicken, tomato, lettuce and (pepper) mayonnaise wrapped in a tortilla. In Europe, the Twister is sold in two varieties: 1) the Grilled Twister (chicken strips),[23][24][25] and 2) the Grilled Mexican twister/Spicy Toasted Twister (UK) (chicken breast supplemented by tortilla chips and salsa, UK: adds only salsa to pepper mayonnaise),[26][27][28]

KFC Fillers are a 9 in (23 cm) sub, available in four varieties over the summer period in Australia. Shish kebab in several markets KFC sells kebabs. Kentucky Barbecued Chicken barbecued chicken dipped in the original recipe Wrapstar is a variant of the KFC Twister, consisting of chicken strips with salsa, cheese, salad, pepper mayonnaise and other ingredients, contained in a compressed tortilla.[29][30]

Other products

Coleslaw

In some locations, KFC may sell hamburgers, pork ribs or fish. In the U.S., KFC began offering the Fish Snacker sandwich during Lent in 2006. The Fish Snacker consists of a rectangular patty of Alaskan Pollock on a small bun, and is the fifth KFC menu item in the Snacker category.[31] Some locations also may sell KFC 'Mashies' balls of mashed potato cooked in original recipe batter[32]

Three types of salads (which can be topped with roasted or fried chicken) are available at KFC in the United States: Caesar, house, and BLT salads.

The Boneless Banquet Zinger Burger A regular sized burger which consists of a spicy chicken fillet with lettuce and mayonnaise in a burger bun. Cheese, tomato, bacon and pineapple can be added upon request in some locations. Barbecue sauce can also replace/join the mayonnaise in some locations. Chili Cheese Fries[33] By 2007, 2 former KFC/A&W Restaurants locations in Berlin and Cologne, Germany had reverted to KFC-only locations and the third location in Garbsen (by Hannover) was closed in 2005. The only remnant from the former A&W menu are the Chili Cheese Fries which were added to the systemwide KFC Germany menu. Parfait desserts "Little Bucket Parfaits" in varieties such as Fudge Brownie, Chocolate Crme (once called the Colonel's Little Fudge Bucket), Lemon Crme and Strawberry Shortcake are available at most locations in the US.[34]

Kentucky Nuggets - a chicken nugget product available at KFC from December 1984. It is still sold in New Zealand (as "Chicken Nuggets") and Australia, but has been discontinued in some other countries (e.g. Canada) since 1996. Sara Lee Desserts Available in either Cookies and Cream Cheesecake or Choc Caramel Mousse in some locations.

Krushers, available in Australia, India, New Zealand and South Africa. These are drinks containing "real bits". They include "classic krushers", "smoothie krushers" and "fruit krushers". Some outlets are now equipped with "Krushbars" to serve these drinks. In the U.K., Krushers are known as Krushems.

Pastel de nata - varieties of the Portuguese Egg Tart is offered in several Asian locations.

Side Dishes

Other than fried chicken, many KFC restaurants serve side dishes like coleslaw, various potato-based items (including potato wedges [formerly known as Kentucky Fries], french fries and mashed potatoes with gravy), biscuits, baked beans, macaroni and cheese, macaroni salad, rice, steamed vegetables and corn on the cob.

Discontinued products

The Colonel's Rotisserie Gold This product was introduced in 1993 as a response to the Boston Market chain's roasted chicken products, and a healthier mindset of the general public avoiding fried food. Purportedly made from a "lost" Col. Sanders recipe, it was sold as a whole roaster or a half bird. It is unknown as to whether or not Col. Sanders really had anything to do with developing the recipe, however, according to one of Sanders' daughters, he did tinker with a rotisserie product at one time.[35] Tender Roast Chicken This product was an offshoot of "The Colonel's Rotisserie Gold". Instead of whole and half birds, customers were given quarter roasted chicken pieces. For a time, customers could request chicken "original", "Extra Tasty Crispy", or "Tender Roast". Chicken Little sandwich a value oriented sandwich that sold for US$0.39[36] in the U.S. during the late 1980s and early 1990s. It was a small chicken patty with mayonnaise on a small roll, similar to White Castle's mini chicken sandwich.[37] Extra Tasty Crispy (ETC) Chicken much like the Extra Crispy served today, except ETC was prepared using chicken that had been soaking for 15 minutes in a special marinade machine. There is some speculation that the marinade may have been made with trans-fats,[citation needed] and KFC confesses to no longer use trans-fats in their chicken. The known ingredients were garlic and chicken stock. In the summer of 2007, KFC started marketing the chicken just as "Extra Crispy" without the marinade. Smokey Chipotle Introduced in April 2008. The chicken was dipped in chipotle sauce then doubled breaded and fried. It has been discontinued since August 2008.

Nutritional value
KFC has used partially hydrogenated oil in its fried foods. This oil contains relatively high levels of trans fat, which increases the risk of heart disease.

In the United States, the Center for Science in the Public Interest (CSPI) filed a court case against KFC with the aim of making it use other types of oils or make sure customers know about trans fat content immediately before they buy food. In October 2006, KFC said it would begin frying its chicken in trans fat-free oil (<0.5g per serving) in the United States. This would also apply to their potato wedges and other fried foods, however, the biscuits, macaroni and cheese, and mashed potatoes would still contain trans fat. Trans fat-free soybean oil was introduced in all KFC restaurants in the U.S. by April 30, 2007, and CSPI dropped its lawsuit. However, outside the United States the company has continued to use other types of oil that have drawn criticism over their health effects. In Australia, KFC was reported to be using palm oil with up to 1 per cent trans-fat and 52 per cent saturated fat content as late as 2007, after restaurants in the United States had changed to trans-fat free oil.

Advertising

KFC's logo used from 1997 until November 2006 Despite his death in 1980, Sanders remains a key symbol of the company in its advertising and branding. Early television advertisements for KFC regularly featured Sanders licking his fingers and talking to the viewer about his secret recipe, and by the 1960s both the Colonel and the chain's striped bucket had become well-known. The bucket as product placement can be seen in the hands of both Annette Funicello and Dwayne Hickman in 1965's How to Stuff a Wild Bikini, and was also featured prominently in the 1968 Peter Sellers vehicle, The Party. KFC itself was featured in 1980's Superman II. The Colonel made appearances as himself in Jerry Lewis's The Big Mouth (1967), Herschell Gordon Lewis' Blast-Off Girls (1967) and Al Adamson's Hell's Bloody Devils(1970), as well as an appearance in 1968 on Rowan & Martin's Laugh-In.

Before he became a platinum-selling pop star in the 1970s, Barry Manilow sang the commercial jingle "Get a Bucket of Chicken", which was later included on Barry Manilow Live as part of "A Very Strange Medley." Throughout the mid 1980s, KFC called on Will Vinton Studios to produce a series of humorous, claymation ads. These most often featured a cartoon-like chicken illustrating the poor food quality of competing food chains, mentioning prolonged freezing and other negative aspects.[40] TV ads also featuredFoghorn Leghorn advising Henery Hawk to visit the restaurant for better chicken. In the 1980s, KFC was an associate sponsor for Junior Johnson's NASCAR Winston Cup Series cars, with such drivers as Darrell Waltrip, Neil Bonnett, andTerry Labonte. A 1982 episode of Little House on the Prairie titled "Wave of the Future" featured a character presumed to be Col. Sanders offering Harriet Oleson a fried chicken franchise (perhaps a subliminal advertisement for KFC), but his character was credited as "Bearded Man" for legal reasons. This subplot was an anachronism as Sanders had not yet been born at the time the episode was set (the late 19th century). In 1997, KFC briefly re-entered the NASCAR Winston Cup Series as sponsor of the No.26 Darrell Waltrip Motorsports Chevrolet with driver Rich Bickle at theBrickyard 400.

A co-branded Long John Silver's and KFC By the late 1990s, the stylized likeness of Colonel Sanders as the KFC logo had been modified. KFC ads began featuring an animated version of "the Colonel" voiced by Randy Quaid with a lively and enthusiastic attitude. He would often start out saying "The Colonel here!" and moved across the screen with a cane in hand. The Colonel was often shown dancing, singing, and knocking on the TV screen as he spoke to the viewer about the product.

A KFC Take-away Trailer located inSargodha, Pakistan The animated Colonel is uncommon today. Still using a humorous slant, the current KFC campaign revolves mostly around customers enjoying the food. It also features a modified version of Lynyrd Skynyrd's "Sweet Home Alabama" as the theme song for practically all its commercials, though the restaurant actually hails from Kentucky. In 2006, KFC claimed to have made the first logo visible from outer space, though Readymix has had one since 1965. KFC says "It marked the official debut of a massive global re-image campaign that will contemporize 14,000-plus KFC restaurants in over 80 countries over the next few years." The logo was built from 65,000 one-footsquare tiles, and it took six days on site to construct in early November. The logo was placed in the Mojave Desert near Rachel, Nevada. It is located in the northern section of Rachel, Nevada at of Area 51. Many KFC locations are co-located with one or more of Yum! Brands restaurants, Long John Silver's, Taco Bell, Pizza Hut, or A&W Restaurants. Many of these locations behave like a single restaurant, offering a single menu with food items from both restaurants.[44] 37.6460N 115.7507W, a few miles from the eastern border

Revival of Kentucky Fried Chicken old logo One of KFC's latest advertisements is a commercial advertising its "wicked crunch box meal". The commercial features a fictional black metal band called "Hellvetica" performing live, the lead singer then swallows fire. The commercial then shows the lead singer at a KFC eating the "wicked crunch box meal" and saying "Oh man that is hot". Commercials in the early 2000s tried to imply that the abbreviation stands for Kitchen Fresh Chicken. In 2007, the original, non-acronymic Kentucky Fried Chicken name was

resurrected and began to reappear on company marketing literature and food packaging, as well as some restaurant signage. In 2010, an advertisement was shown in Australia showing an Australian cricket fan giving West Indies fans KFC chicken to keep them quiet. The ad sparked a debate over racism in the ad, suggesting that all black people eat fried chicken. Fried chicken was eaten by black slaves[citation needed] because it was cheap and easy to make. Though KFC stated that it was "misinterpreted by a segment of people in the US", the ad was later pulled from TV. However, several Australian commentators have expressed the opinion that the ad is not racist, because this is not a racial stereotype in Australia and the cricket fans in the ad are not African American, but West Indies cricket supporters (the West Indies cricket team was playing a Test cricket series against the Australian cricket team at the time of the ad).[47][48] Also in 2010, Yum! signed a naming rights deal with the Louisville Arena Authority for Louisville's new downtown arena, which opened on October 10 of that year as the KFC Yum! Center. Reception

Environmental concerns
KFC in the US has been accused by Greenpeace of a large destruction of the Amazon Rainforest, because the supply of soy used for chicken food that KFC receives from Cargill has been traced back to the European KFC. Cargill has reportedly been exporting soy illegally for several years.[49] The Greenpeace organization researched the issue and brought it to the attention of the parent company YUM! Brands, Inc. The parent company denied the illegal operation, and said that their supply of soy is grown in parts of Brazil.[49] Greenpeace has called on KFC to stop purchasing soy from Cargill, to avoid contributing to the destruction of the Amazon.

Trademark disputes
In 1971, Sanders sued Heublein Inc., KFC's parent company at the time, over the alleged misuse of his image in promoting products he had not helped develop. In 1975,

Heinlein Inc. unsuccessfully sued Sanders for libel after he publicly referred to their gravy as "sludge" with a "wallpaper taste". In May 2007, KFC (Great Britain) requested that Tan Hill Inn, in the Yorkshire Dales, North Yorkshire, United Kingdom refrain from using the term 'Family Feast' to describe its Christmas menu, although this problem was quickly resolved with the pub being allowed to continue use of the term.

Animal rights

Protesters demonstrating outside a KFC restaurant in Royal Oak, Michigan Since 2003, animal rights and welfare organizations, led by People for the Ethical Treatment of Animals (PETA), have been protesting KFCs treatment of the animals used for its products. These groups claim that the recommendations of the KFC Animal Welfare Advisory Council have been ignored. Adele Douglass, a former member of the council, said in an SEC filing reported on by the Chicago Times, that KFC "never had any meetings. They never asked any advice, and then they touted to the press that they had this animal-welfare advisory committee. I felt like I was being used." KFC responded by saying the chickens used in its products are bought from suppliers like Perdue Farms, Tyson Foods, and Pilgrim's Pride, and that these suppliers are routinely monitored for animal welfare violations. Several PETA undercover investigations and videos of these and other KFC suppliers purporting to show chickens being beaten, ripped apart, and thrown against walls contradict KFCs claims. PETA has criticized some of the practices of chicken breeders, such as beak trimming and overcrowding, but KFC says its suppliers meets UK legal requirements. The Department for Environment, Food and Rural Affairs recommends a maximum stocking density of 34 kgaround 30 chickensper square metre, and say that in circumstances where beak trimming needs to be carried out to prevent the birds injuring each other, only one third of the beak should be trimmed "measured from the tip

towards the entrance of the nostrils". PETA states that they have held more than 12,000 demonstrations at KFC outlets since 2003 because of this alleged mistreatment of chickens by KFC suppliers. In June 2008, KFC Canada agreed to PETA's demands for better welfare standards, including favoring suppliers who use controlled-atmosphere killing (CAK) of chickens, and other welfare standards as well as introducing a vegan sandwich at 65% of its outlets. PETA has called off its campaign against KFC Canada, but continues to demonstrate against KFC elsewhere in the world.

Dispute over ingredients

In Summer 2011, a KFC franchisee serving Fiji, Kazi Foods, was forced to close down all three KFC locations in that country, due to the dispute over increasing duties and the eventual ban on the importation of specific key ingredients used to make the chicken. The restaurants closed as without the ingredients the chicken will not be up to KFC corporate standards.

International operations
According to the corporate website, KFC is present in 110 countries and territories around the world. It has in excess of 5,200 outlets in the United States and more than 15,000 units in other parts of the world. In Quebec, however, its name is PFK. An outlet opened in Nairobi, Kenya on August 2011. It is the first US-based fast food restaurant in the nation as well as in East Africa. In December 2011 the first KFC was opened in Croatia, in Zagreb.[65]

CHAPTER 3

ANALYSIS

Market Analysis Year 1 Potential Customers Young Singaporean s 15% 5,000,000 5,750,000 6,612,500 7,604,375 8,745,031 15.00 % Growt h CAGR Year 2 Year 3 Year 4 Year 5

Working Singaporean s 10% 3,000,000 3,300,000 3,630,000 3,993,000 4,392,300 10.00 % 20.00 Tourists 20% 3,800,000 4,560,000 5,472,000 6,566,400 7,879,680 11,800,00 13,610,00 15,714,50 18,163,77 21,017,01 Total 15.52% 0 0 0 5 1 % 15.52 %

Need real financials? We recommend using Live Plan as the easiest way to create automatic financials for your own business plan. 4.2 Target Market Segment Strategy Fresin Fries intends to cater to the bulk of teenagers and youngsters in Singapore. We have chosen this group for several important reasons. It is our goal to be "the extraordinary fast food place" and we believe that the age group from 15 to 25 is the primary age where brand building efforts could take place. They are on limited or fixed incomes and seek a value/price relationship that will not stretch their budgets. Our secondary target is between the ages of 25 and 37, which are a heavy lounge/restaurant user group. They are more flexible in budgets and seek more than a value/price relationship. Our lunch strategy is dual purposed. First, we are featuring fresh fries to fill Singapore's craving for fast food as most ideas of lunch is a quick bite not a heavy meal. Second, we want to keep the price point at lunch as fair as possible to keep us in competition with other fast food outlets. At S$4.00 for a medium size fries, we are only slightly above the segment, but we offer much more excitement than the rest of the competition. 4.2.1 Market Needs Frewin Fries sees our targeted market group as having many "making" (eating) Singaporean Dollar needs. A recent Consumer Trend and Analysis by Euro monitor identified the following needs among our target markets. Our core group:

Wants variety and flavor in its food, preferably something fried Looks for speed of service Wants an entertaining and fun experience Insists upon a clean, friendly, and attractive environment Adopts a global lifestyle Is computer literate Enjoys eating out Has an active lifestyle Comes from various ethnic backgrounds According to a GAIN Report published in 2000, potatoes are the second largest commodity of US exports to Singapore after fresh fruit, valuing almost USD $13 million per annum. This is caused by the increasingly younger demographic and rising incomes throughout Singapore that have led to lifestyle changes that are influencing consumer purchases, food, and entertainment choices. Some changes taking place include a larger professional class with more working women, which means greater disposable incomes. 4.2.2 Market Trends In the past, Singaporeans preferred Western chain restaurants. This was the time when KFC, McDonald's, Long John Silver's and Pizza Hut were dominating most of the chains. But the trend seems to have shifted in the last decade, with the success of the locally grown brands, such as Bread Talk and Bee Che Hiang. Many of these local brands grew to become giant franchises that dominate the Southeast Asia region. For instance, Bread Talk controls 55% of Indonesia's bakery market. The key to success for these foreign chains was mainly due to the popularity of Singapore as tourist destination for these countries. Tourists are the strongest "buzzer." Usually after they went back from vacationing in Singapore, they told friends and families about new things in Singapore, including new shopping malls, new boutiques, new restaurants, and new fast food joints. The fascination of Asian tourists coming to Singapore has positioned the city itself as an aspiration to modern life in the region. Many local entrepreneurs camouflaged their retail stores as an international brand in accordance to what they sell. For instance, there is a local entrepreneur who created a

Japanese name to sell yakitori (Japanese BBQ meat skewers), and there is a fashion boutique named after an old Italian movie. 4.3 Industry Analysis Despite the prolonged effects of the Asian Economic Crisis followed by political turmoil up to mid-2001, Singapore's food service industry witnessed growth over 2000/2001 at 4 - 5% in terms of units and transaction (Euro monitor). Much of this growth was contributed by the cafes/bars, fast food, and food retail sectors, who are wide, appeal amongst a young population, for whom time is of a premium, led to high levels of growth. This growth is underpinned by market demand and lifestyle changes, such as seeing eating out as part of trendy lifestyle. Entry of major multi-national food service operators into major shopping destination in the late 1980s until the 1990s led to growth in competition in the marketplace, mainly from fast food chains. This stimulated the rise in the number of fast food units, both of international and local chains that started in the early 1990s. Although there was a slowdown during the economic crisis in 1998, the food service industry recovered faster than others, particularly during 2000 and 2001. Recent bombing tragedies have also proven that negative effects on this sector are moderately short-term. Franchising became popular in the food service industry through the introduction and entry of multi-national food service brands, primarily U.S.-owned enterprises, such as KFC, Pizza Hut and McDonald's. Currently, there are many local chains that have also experienced growth by applying this system to their operations. 4.3.1 Trends in Food Service Retail According to government surveys, Singapore's spending on "eating out" is continuing to increase. Spending on cooked food as a percentage of total average food-spend reached 55% in 1998. The growth in spending in the food service sector arises from a number of factors:

Increased affluence amongst Singaporeans, especially those under the age of 40 years. Increases in the number of expatriate residents, which has more than doubled since 1988.

Increased convenience-seeking amongst younger Singaporeans who live in a hectic city today compared to the much slower pace of life that existed 20 years ago.

When they want convenient cooked food, Singaporeans have long turned to the local hawker stalls, rather than prepared ready-to-cook or ready-to-eat processed convenience foods. As the numbers and variety of food service outlets has increased in Singapore, locals have adopted the convenient products of other food service outlets, especially the fast food outlets, as alternative sources of convenient cooked food. Younger middle and upper income group families and individuals are also frequent users of the full service restaurants, modern-style coffee shops and cafs that now exist all across Singapore. Over the past 5 years, there has been a general upgrading in the food service sector which has seen the establishment of more air conditioned food centers (food courts) that are considerably cleaner than the traditional hawker markets. At the same time, increased investment from foreign and local businesses in the sector has also produced an increase in the numbers of:

Foreign chains, including chains such as Outback Steakhouse. Modern retail bakery/caf outlets such as Bread Talk. Modern coffee shops such as Starbucks. 4.3.2 Competition and Buying Patterns The competition in this arena is the fiercest in all other metropolitan areas in SE Asia. Singapore is a compact city, but has a lot to offer. Usually there are a minimum of two of the same outlets within a radius of less than 300 meters. For instance, Bread Talk opens one outlet inside the Ngee Ann City Shopping Centre and another just across the street inside the Far East Plaza Shopping Centre. It is quite common for retailers to implement this kind of strategy, due to the high volume of people strolling around the main area of Orchard Road. Another reason is because many retailers do not want to lose sales opportunity, as the competitors are offering substitutions and similar product categories. This phenomenon has made Singapore the best place to shop. If you just missed Hagen Dazs waffle at CK Tang Shopping Mall, there is another Hagen Dazs across the street at the new Paragon Shopping Centre.

4.3.3 Main Competitors Our main competitors in this segment are any food outlets within the 300 meter radius along the Orchard Road. In our location, there are Tori-Q, Pizza Walker, Starbucks, Bread Talk, and Rotiboy. Tori-Q Tori-Q is locally owned franchise who sells Japanese BBQ skewers. Established in 1998, Tori-Q had expanded its operation into neighboring countries, Indonesia, Malaysia, and Thailand. Tori-Q is popular among local teenagers as it offers fast service to its customers. Commonly, Tori-Q outlets are rather small, and can only serve a maximum of 6 guests. It is a choice for those who are in a hurry and would like to grab a quick lunch on the way. Pizza Walker Pizza Walker is a joint venture positioned as gourmet pizza joint in Singapore. Most of its retail outlets are decorated with welcoming ambience, such as flowers and seethrough kitchens. Pizza Walker is a good place to hang out, and the place is always full during lunch hour. It has more than enough tables to serve a maximum of 55 guests. Its specialty is all-you-can-eat pizza! Starbucks Starbucks' strategy entering the lunch market had made some impact in Singapore. Usually, a lunch menu in Singapore consists of "fried and BBQ stuff" such as roast pork with rice or the Big Mac. Starbucks is one of the first food retailers that popularized "light and healthy" alternatives such as salad or lean sandwich as an options for Singapore's lunch accommodations. Bread Talk As the most successful franchiser in Singapore, Bread Talk is surely becoming a threat for most food retailers. Bread Talk not only rented most of the retail space along Orchard Road, but now they are doing delivery to offices and apartments nearby. Bread Talk outlets usually consist of a huge see-through kitchen, and bread trays ready for pick-up by customers, with three or four cashiers at front, to speed up the queue. Rumor has it that Bread Talk sold more than 35,000 breads each day in just one of their retail outlets.

Rotiboy A Malaysian franchise. Rotiboy is quite popular in the region as it is now expanding into several cities in Indonesia, Vietnam, Thailand, and the Philippines. Rotiboy offers simplicity for quick lunch franchiser, and often considered alternatives for its long queueing rivals. 4.3.4 Foreign Vs. Local Franchising Around 40% of the franchises operating in Singapore are foreign. Home grown franchises are still in their maturing stages as they start to expand globally. Franchises from the U.S. account for 65% of foreign brands, with big players such as KFC, Starbucks, Pizza Hut, etc. Due to high capital investment, Singapore conglomerates tend to dominate the industry. Home grown franchises are more often sought more by young entrepreneurs than are their Western counterparts, as they offer greater flexibility and lower franchise fees to operate. Unlike Western license holders, home grown franchises are more efficient in the overall supply chain management as the basic raw ingredients are commonly found anywhere in the region.

Conclusion
KFC- the worlds largest fast food which has satisfied and touched the heart of the people of all the age group. It is the most successful fast food which is being operated around the globe. It has also fulfilled the drawback of location by the help of branches in every country. This is the most widely preferred fast food by the people.

BIBILOGRAPHY
1. www.google.com 2. www.altavista.com 3. www.wikipedia.org