A Whopper Of A Tale

August, 2004

Zubair Kazi is serious about customers having it their way. Kazi presides over a 220-franchise restaurant empire covering nine states. However, when the president of California-based Kazi Foods visits one of his restaurants, he’s so customer-focused that he is as comfortable jumping in to help the staff wipe a table as he is discussing the latest financial figures with management. Says Kazi Foods chief executive officer Chris Scanlan, “There is a culture in the Kazi Foods system that is very hands-on and customer-oriented; that leadership starts at the top.” For Kazi Foods Corp. of Hawaii, that leadership has translated into $55 million in revenues from 28 KFC and 21 Burger King restaurants, earning the company the 128th spot in Hawaii Business’s Top 250.

Kazi’s hands-on style may seem unusual, but Bruce Stebbins, general manager for KFC’s franchiser, Yum! Brands International, says this is how Kazi gets to know his employees and delegate effectively. “He gets quality people around him, then he lets them take an active interest in the business. He knows the people well and knows what they can and can’t do, so he’s very successful at getting the most out of his people,” he says. Scanlan says Kazi gives his employees the freedom to implement their ideas. He says, “[Kazi] allows us occasionally to make mistakes. But at the end of the day we’re accountable, we’re given the resources, the freedom to do whatever it takes, and we’re allowed to succeed.”

Kazi Foods Hawaii has had whopper-sized success. In 1997, when PepsiCo diversified its restaurant holdings and formed franchiser Tricon (an independent company now known as Yum! Brands), Kazi won the bid for 29 Hawaii KFC outlets based on the strength of his reputation as a profitable franchisee. By then, he already owned 120 outlets. In 2002, Kazi Foods Hawaii expanded further when it bought 19 Burger King outlets out of bankruptcy from Cimm’s. Steve Johnson, general manger of Kazi Foods Hawaii and former area supervisor for Tricon, says Kazi made his expectations clear from the start: “He said, I’m going to let you run the business, but I would like you to focus on these key areas.” They included reducing overhead, renegotiating leases, improving distribution, and, whenever possible, sourcing as much material out of Hawaii or ordering in bulk shipments from the Mainland. The company also hired advertising executive Doug Harris, whom Johnson credits for seamlessly blending local advertising with the national KFC ad campaigns.

Johnson says the strategy worked: the company recently completed its fifth year of continuous compounded growth, totaling almost 20 percent. Johnson adds that Burger King has bounced back from bankruptcy. “When we acquired them, our average restaurant did $940,000 a year. This year, we’re going to surpass the $1.3 million-per-store-average. We’re the number one market in the United States right now as far as comparable sales over previous years.” The franchisee is poised for further growth. In the next three years, Scanlan says the company plans to add 10 more KFC outlets and another 25 to 30 Burger King restaurants. Johnson says that by 2007, all branches will be renovated to corporate standards.

Kazi remains bullish on Hawaii, and not just because the state is second only to Puerto Rico in per-capita fast-food consumption. Scanlan says that Kazi’s business ventures – and plans to invest in Hawaii – extend beyond fast-food restaurants. Case in point: his unsuccessful bid for Hawaiian Airlines, spurred by Kazi’s love of Hawaii and experience as a pilot for the past 30 years. In other regions, Kazi has invested in a range of industries, from shopping centers and commercial real estate on the Mainland, to shrimp farming in Central America, to farms and orchards in India, to a sunglass manufacturing company in Southern California, to biotech and venture capital. Based on these varied interests, Scanlan says it’s safe to say that Hawaii will be hearing more from Kazi in the future: “He loves Hawaii, both the environment and the people, so it’s natural for him to look at business opportunities. Since we found success there, it only makes sense to continue.”

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