By: Business Daily
The ubiquitous Kenchic Inn name is set to disappear from city streets after the poultry company behind it terminated franchise agreements with about 30 fast-food restaurants that use it across the country in a bid to protect its brand.
The firm has announced that all “Kenchic Inn” restaurants should cease using the name as from March 31, explaining that this move is informed by a strategic decision to concentrate on its core business.
Kenchic, in a statement to its franchisees, said it had decided to exit the agreement “due to Kenya’s rapidly evolving local fast food market”.
International fast-food chains such as Kentucky Fried Chicken (KFC), Subway and Pizza Hut have recently opened shop in Kenya, offering an expanded market for Kenchic whose core business is to hatch and sell chicken.
The franchisees are accused of disregarding quality standards at their restaurants, which Kenchic feared would impact negatively on its brand and possibly hurt its sales.
“Effective March 31, Kenchic will discontinue the use of the brand Kenchic Inn,” Philip Carolan, Kenchic’s processing and sales distribution operations manager said in the letter.
“At the end of the period, the Kenchic Inn brand will no longer be used nor will any of the Kenchic-associated logo’s brands or colours.”
Kenchic, which was established in 1984, produces processed chicken for consumption (broilers and layers) as well as day-old chicks which are sold to farmers.
The firm produces about 600,000 layer and broiler chicks per week.
It also packages processed meat products (whole chicken, thighs, drumsticks, burgers, sausages, viennas, and wings) in supermarket under the brand name Farm 2 Fork.
The company in December moved into its newly-built Sh350 million chicken processing factory in Thika which has a capacity to slaughter 30,000 chickens per day and closed its Tigoni (Limuru) slaughter house.
Some of its clients include international franchises like Steers, Galitos, and KFC as well as in-flight caterer NAS Servair and several leading hotels in the country.
To grow sales and its brand, the company years back entered into franchise agreements with independent businesspeople who operated fast-food restaurants using the Kenchic Inn name.
Kenchic’s only requirement, in exchange, was that these restaurants use chicken exclusively sourced from them and that businesses are run at the highest standards.
However, some Kenchic Inn restaurant owners resorted to buying some of their chicken from other sources while others did not uphold the quality demanded by the poultry company.
This led to disagreements between Kenchic’s management and the restaurant owners and played a role in yesterday’s decision to end the business partnership as Kenchic sought to protect its reputation.
“We would like to thank you for your support over the years. The relationship has been a long and successful one,” said Mr Carolan.
“Our product will still remain available for all, at the same pricing and we will continue to supply you as and when required.”
Kenchic has six breeder farms in Kajiado and Naivasha and distribution centres in Nairobi, Mombasa, Nakuru, Kisumu, Meru and Nyeri. It is from the breeder farms that Kenchic sells chicken — such as the popular Kenbro breed — to farmers.
Since 2010, the poultry company has injected more tha Sh1.5 billion into its breeding and hatchery facilities.
Three years ago, it spent Sh800 million to expand the broiler farm and hatchery at Athi River, with most of the money being used in acquiring new equipment from Germany.
The firm also exports its products to Uganda and Tanzania among other countries.