McDonald's Australia in multi-million expansion drive

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SYDNEY -- McDonald's Australia plans to sink $325 million into expanding its 560-outlet estate by more than 50% over the next four years.

The drive for growth is part of the chain's strategy to consolidate its position as the dominant fast food retailer in Australia, with almost three stores per 100,000 people, against an average of one per 100,000 for its major competitors KFC and Pizza Hut. It will add 320 sites by 2001.

McDonald's Director Bob Baird said the company's success with smaller, free-standing restaurants, combined with its successful alliances with major oil companies and retailers, had sparked the expansion.

The new restaurants will mark McDonald's push into airports, retail stores and petrol stations, he says. McDonald's Australia owns about 80% of its outlets, compared with the worldwide company average of about 50%. Around 60% of the Australian stores are leased on 20-year terms to franchisees who pay a base rent and percentage of gross sales - usually about 10%.

Copyright August 1996 Crain Communications Inc.

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