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SYDNEY-Australia's sizzling $4 billion fast-food market is being eyed by Church's Chicken and Popeye's, which hope to make off with some of Kentucky Fried Chicken's $350 million in annual sales here.

The two chains, part of America's Favorite Chicken Co., are keen to repeat their U.S. success, where Popeye's and Church's have worked their way up to reach the second and third places behind PepsiCo-owned KFC.

According to U.S. restaurant consultants Technomics, KFC led the U.S. market in 1992 with $3.4 billion in systemwide sales, compared to $556 million for Popeye's and $430 million for Church's.

The first stores are expected to open by the end of this year, although AFC won't say how many stores are expected or when.

McDonald's Corp. is Australia's leading fast-food marketer. KFC is second.

Church's Chicken and Popeye's plan to operate separately to target two ends of the market-the upper end with Church's and the super quick-serve end with Popeye's. (Coles Myer's local outlet Red Rooster holds a smaller share of the market.) AFC said its 10-year plan is to match KFC's 400 stores.

That, coupled with its policy of budgeting 5% of sales for advertising and its ambitious goal of giving KFC a run for its money, would boost the local ad industry.

AFC has appointed CIA Communications to handle both brands, although no ad strategy has yet been set. In the U.S., Levenson & Hill, Dallas, handles Church's while Fitzgerald & Co., Atlanta, handles Popeye's.

Church's Chicken, which started in San Antonio in 1962, offers eat-in service as well as takeaways. Popeye's Famous Fried Chicken & Biscuits was founded in New Orleans in 1972. It offers zesty cajun-style fried chicken at the quick-service end of the market.

AFC has about 2,000 stores in the U.S. and has entered the European, Canadian, South American, Middle East and Asian markets.

Jeanne Whalen contributed to this story.

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