S Korean fried chicken chain Kyochon forms Thai JV with Evolution Capital

Under the partnership, the listed Thai company holds an 80-per-cent stake in the joint venture –Kyochon Co Ltd – while the remaining 20 per cent is owned by Kyochon F&B. 

Based in Bangkok, the new company owns the master franchise agreement for Thailand, Myanmar, Cambodia and Laos.

Sanjay Singh, chief executive officer of Evolution Capital, yesterday said Thailand was the key location for Kyochon’s business expansion.

The company has already opened two corporate-owned Kyochon full-service restaurants, at MBK shopping centre and Paseo Town on Ramkamhaeng Road. 

Two sub-franchised restaurants have been also opened, at Sukhumvit Road Soi 12 and Fashion Island shopping complex.

“We plan to open up to eight Kyochon restaurants by the end of this year, of which five will be corporate-owned outlets and the other three will be sub-franchised outlets,” said Singh.

He added that the company next year would increase the Kyochon store count in the Kingdom to about 16 corporate-owned restaurants and eight sub-franchised outlets.

Singh said the number of Kyochon restaurants in Thailand would reach about 40 for corporate-owned outlets, as well as between 20 and 25 sub-franchised outlets, within four years.

“In addition to Thailand, we will also launch the Kyochon fried-chicken business in Cambodia in 2015, with the first corporate-owned restaurant to be opened in Phnom Penh in a joint venture with a local partner. We are in discussion with a potential partner in Cambodia, and the joint venture there will be set up before the end of this year. 

“We plan to open about five Kyochon stores in Cambodia in the next three to four years under the joint venture,” said the CEO.

Evolution Capital is also conducting a feasibility study into starting up the Kyochon business in Myanmar late next year, or at the beginning of 2016. 

Initially, the company will be looking for a local partner in Myanmar to be the minority stakeholder in the venture, he said. Evolution Capital expects to own about two-thirds of the joint venture. 

The launch of Kyochon business in Laos will follow the establishment of the Myanmar venture, he added.

Having been in the fried-chicken business for almost 23 years, Kyochon F&B now operates 900 restaurants in South Korea alone – all of them franchised outlets. 

The company has also opened franchised restaurants in the US, Malaysia, the Philippines, Indonesia and China. 

However, the new Thai business is the first joint-venture partnership that the company has conducted outside South Korea.

“For Kyochon, they feel Thailand is a very important market for them. They are intending to use Thailand as a hub and springboard for expanding the fried-chicken business in neighbouring markets,” said Singh.

Evolution Capital, meanwhile, sees fried chicken as one of the biggest segments in the Kingdom’s Bt30-billion casual-dining and quick-service restaurant market, representing 40 per cent of the total.

While KFC and McDonald’s are the big players in the local fried-chicken restaurant segment, the rest of the market is fragmented.

A major Kyochon selling point is that it offers fresh and healthier ingredients and targets families and young adults looking for healthier options, said the chief executive.

Evolution Capital now operates three international restaurant and beverage brands – Domino’s Pizza, Coffee Bean & Tea Leaf, and Kyochon – as well as one company-owned bakery-house brand, Mr Jones’ Orphanage. 

The company plans to franchise Mr Jones’ Orphanage outlets in potential markets within Asean in the next two to three years, he said. 

The company has also the right to open Domino’s Pizza restaurants in Cambodia, where at least two outlets will be opened by the end of this year.

“We expect to have 50 stores opened in Thailand under the Domino’s Pizza, Coffee Bean & Tea Leaf and Kyochon brands by year-end. The number of our branded restaurants in Thailand will be expanded to 100 by the end of next year, and up to 250 stores in 2018,” said Singh.

Evolution Capital expects to achieve Bt650 million in overall revenue this year, up 54 per cent from the Bt420 million posted last year. The company targets annual revenue reaching Bt5 billion in 2018.