Tastes Like Success: North Miami's Chicken Kitchen Is Ready To Cross State Borders And Take Its Concept National. Is The Us Ready For The Chop Chop?

Wednesday, October 01, 2003

* Longtime fans of Chicken Kitchen will tell you it's all about the Chop Chop, the restaurant chain's trademarked plate of yellow rice topped with chopped boneless chicken breast and pita bread. CEO Christian de Berdouare says his cousin, who works at the company, came up with it.

"He used to cut breast off the bone, chop it up and mix it with the yellow rice at the South Miami store, where he worked. He'd make it for himself," de Berdouare says. "Some of the customers were curious about it, started asking about it, and we made it for them when they wanted it. It wasn't even on the menu for the first two years we were offering it." Today, the Chop Chop and its variations--there's a Cuban Chop, a Mexican Chop, etc.--accounts for 80 percent of Chicken Kitchen's sales.

Now the question is whether the rest of the country is ready for the dish. After almost 20 years of increasing market penetration in South Florida, Miami-based Chicken Kitchen is ready to take its "fast-casual" franchise concept national. De Berdouare says he's hatching plans with several large restaurant operators in markets such as Chicago, Ohio, Las Vegas and Alabama to open more than 20 restaurants from the Midwest to the Northeast over the next few years.

That would almost double the current number of Chicken Kitchen outlets. Currently 25 operate in South Florida, mostly in Miami-Dade, but also in Broward and Palm Beach counties. While that is a relatively small group, Chicken Kitchen is expanding rapidly--up until 1998, when he started selling franchises, de Berdouare had just six restaurants in his coop.

But de Berdouare is confident that he can ride the national trend in the "fast-casual" market, into which Chicken Kitchen falls. The hallmarks of the category are: a slightly more upscale setting; food that is freshly made to order; and checks that average between $7 and $9. According to Harry Balzar, vice president of New York-based market research firm NPD Group, fast-casual restaurants saw an increase in traffic of 9 percent last year, compared to a 1 percent increase in the traffic at traditional fast-food outlets.

Granted, the fast-casual segment represents only about 2 percent of the $9 billion quick-service food industry nationwide. Nevertheless, "I always thought that it was just a matter of time before people became conscious of what they're eating," de Berdouare says, referring to the general impression that fast-casual food (his includes fresh vegetables) is healthier than traditional burgers and fries. "Today we are as well-positioned as anybody else in the industry." De Berdouare is also betting on the financial rewards his franchisees will reap. His Chicken Kitchen outlets bring in an average of $1.1 million each, per year--in locations that average 1,500 square feet or less in size. "Nobody beats us in sales per square foot in the whole country," he says. One 1,064-square-foot outlet in South Miami--which de Berdouare owns--does a staggering $40,000 in sales per week.

For franchisees, setting up a Chicken Kitchen costs between $350,000 and $400,000, plus a one-time $30,000 franchise fee. The contract lasts 20 years, and franchisees pay 5 percent in royalties weekly, plus small annual advertising and marketing fees. "You're profitable from day one," de Berdouare says. "They become cash flow machines." The food, too, doesn't fall into a specific ethnic category, a peril that locally owned Pollo Tropical faced when it took its Cuban-style chicken concept national in the mid 1990s, opening 34 restaurants in just 15 months. Thirteen of those stores closed within a year, with Americans outside of the South Florida market clearly not ready for the heavily Havana fare. "If I go to, say, Los Angeles, I'm not going to offer black beans, I'm going to offer pinto beans," de Berdouare. "Our plan is to adapt our concept to whatever region we go into." Chicken Kitchen was originally headquartered in New York City, where de Berdouare--who was working in the city as a commodities trader when he decided to jump into the restaurant business--bought half of the company in 1985. At the time, the chain had only three locations and was struggling. "We bought 50 percent of the company and it was a nightmare," he says. "They were $700,000 in debt when [the owners] said they were $200,000 in positive cash flow. I had no idea how to run a business. Talk about being thrown to the lions. They were very dark days." Nonetheless, de Berdouare bought the company out within the year and then plotted his exit from New York City. "The economics there just don't work for a small operator," says de Berdouare. "To be in the restaurant industry there you have to be either insane or desperate or both." So he started putting feelers out, opening his first restaurant in South Florida in Bayside Marketplace in 1988. He moved here soon afterward when he got married. A year and a half later, he opened a location across from the Falls Mall in Pinecrest. The South Miami location followed, and remains Chicken Kitchen's best-performing location.

National expansion notwithstanding, de Berdouare knows that additional penetration in South Florida is key to Chicken Kitchen's continued success. He says franchisees are actively opening new stores in South Florida--with five restaurants under construction and 8 more under development. One Miami franchisee (who already operates two stores) is in talks with the company to open an additional five restaurants in Miami-Dade County.

"We're on the leading edge of fast food," de Berdouare says. "There's no gimmicks. What you see is what you eat."

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