Interview with Restaurant Brands CEO Russel Creed.
In the 10 years since Russel Creedy took the top job at Restaurant Brands, the South African's inches-by-inches approach has seen the company move into the sharemarket's top 50 companies, return to profitability, and begin moving into international markets.
With a market value of almost $800 million, the company that operates the KFC, Pizza Hut, Starbucks and Carl's Jr chains has come a long way from being the "dog" that some analysts called it when Creedy took the job.
In 1994, faced with growing unrest in his homeland, Creedy decided to pack up his family and start fresh.
An industrial chemist by trade, he arrived in New Zealand with no job, no contacts and nowhere to live, and says he very soon realised the jobs in his field in New Zealand were fairly limited.
Instead, he landed a job at logistics business Linfox, where he worked for seven years.
"KFC was viewed as a bit of a cash cow and with not much growth left in it," Creedy says.
"It had been around, at that stage, probably about 30-odd years in New Zealand and it had 'done its dash', people thought.
"Things were old and nobody had any vision for it."
Restaurant Brands had a chequered early history. Before Creedy took on the top job, the company had a reputation for overpromising and underdelivering.
Its share price had dived after it cracked the $2.50 barrier soon after listing, and several decisions were questioned by analysts.
"Before Russel [was chief executive] it was pretty bad," says Milford Asset Management executive director Brian Gaynor.
The KFC restaurant, Green Lane. Photo/Dean Purcell.
"The company shareprice had dropped down very low and the company didn't seem to have a clear plan or focus as to what it was doing. It didn't really have any direction, ambition or any real goals."
Tasked with store development, Creedy was in charge of the $1 million revamp of the Frankton KFC in Hamilton.
The store refresh was viewed as a success, and the company gave him the green light to repeat it around the country.
Investment in the brand, and giving it some love, returned the business to profitability and sales doubled.
"He got it focused and set goals and targets and then executed well," Gaynor says. "It's not a magic formula; it's just a formula that was executed very well.
"Creedy was the right person, at the right time in the right place to change it from being a company that promised a lot and didn't achieve anything, to a company that didn't promise a lot and then achieved more than it promised."
The store refurbishments, Creedy says, were the turning point.
"That started the whole renaissance," he says.
"Through just investing over about a 10-year period in KFC, we basically rebuilt the whole network.
"We went from about $170m in sales and a relatively low profit, to today, $300m and a reasonably healthy margin on it, that has been stable for a number of years - and we're not finished," he says.
While all of the company's divisions are profitable, KFC is the jewel in Restaurant Brands' crown.
KFC Tower Burger. Photo/supplied
Of the company's $400m in sales for the 2017 year, $296.5m came from the fried chicken brand.
In April 2016, Restaurant Brands purchased Australia's second-largest KFC franchise for A$82.4m ($88.1m).
The deal to buy the 42 stores in New South Wales represents a strategic move into the country, with Creedy already making plans to add to the KFC Australia stable.
The country has 650 KFC stores - 47 now owned by Restaurant Brands.
Creedy says that number will be closer to 60 by the year's end, but says he is careful to add only stores with growth potential - either in growing suburbs or locations that provide a corridor to other areas.
When it comes to fast food, Creedy says there is no silver bullet, no magic formula - just a slow and steady approach to improvement.
"I'm a big believer in winning the game inch by inch," he says.
"It's about making incremental, logical and sound strategic decisions on the fly all the time. You become good at that.
"You have to keep going forward and not be afraid of making mistakes. Just learn from it.
"And always have an ability to fail safely - so you don't bet the whole ranch on anything but you have to get on with it and learn from failures, and just by practising that you actually get better at success. And that's all I've done for 10 years."
Russel Creedy. Photo/supplied
From making a loss of $3.6m in 2007 - the year Creedy was appointed chief executive - the company's latest net profit, after tax, was $30.6m for year to 2017.
In contrast with KFC, the company's other brands have not performed as strongly, with Pizza Hut facing increased competition in recent years from rival Domino's.
As a result, Restaurant Brands has restructured the pizza chain, selling some stores, including all of its dine-in restaurants, but opening others.
Creedy says he isn't scared to make the decisions he needs to, in order to do what is best for the company.
"It's not a competition to see how many stores we can buy or own, it's always what is best for the business and that's why we're not scared to close stores if necessary or to sell stores.
"It's all about moderating risk and being able to use capital more efficiently in other areas."
Its latest addition, Carl's Jr, has also hit some pitfalls, with the beef burger market a lot more difficult to cut into, Creedy says.
Restaurant Brands' acquisition of the Hawaiian franchise Pacific Island Restaurants was approved in March.
As well as adding Hawaii to its store locations, the acquisition gives Restaurant Brands 82 Pizza Hut and Taco Bell restaurants, and Creedy hints that it may also look to acquire the KFC brand in the state.
Rumours have swirled for years that Restaurant Brands may look to bring Taco Bell to New Zealand - something Creedy says is highly likely one day.
But for now, he says the company has more opportunities than ever, and its biggest challenge is simply choosing which ones to follow.
"Ten years ago it was just hunker down and try and keep the wheels on the road and fix this business," Creedy says.
"And now there's more opportunities than we could ever wish for, it's just picking the right ones."
