The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AML Foods yesterday said it planned to break ground on its first $1-$1.5 million Carl’s Jr store in “about eight weeks”, a venture that will create 70 Bahamian jobs.

Disclosing that the construction tender was set to be issued imminently, Gavin Watchorn, the BISX-listed food retail/franchise group’s president and chief executive, also increased his turnover forecast for the US west coast-headquartered burger chain.

He told Tribune Business it would likely generate $15-$20 million in annual sales within five-seven years, up from the projected $15 million when AML Foods announced the franchise deal with Carl’s Jr last year.

And, predicting that AML Foods would have five Carl’s Jr outlets within that same time period, Mr Watchorn said the chain was likely to employ between 200-250 Bahamians by that stage.

Although still declining to disclose the “flagship” first outlet’s location, the AML Foods chief told Tribune Business: “The actual design of the building is well on its way.

“We are finalising plans. We expect to send the plans out to bid for construction, and hopefully will be breaking ground in about eight weeks.

“The investment is going to be in the region of $1 million to $1.5 million. As for employment, you are probably looking at 70 employees for the first store, operating across three shifts.

“The building itself is a very simple design, and we are expecting to open by Easter next year. That’s our target.”

The Bahamian burger market is intensely competitive, with the major players being the likes of Wendy’s, McDonald’s and Burger King.

Tribune Business sources previously suggested the market is estimated to be worth around $70 million in terms of annual sales. The dominant player is thought to be Aetos Holdings’ Wendy’s franchise, sources suggesting that at the time of that company’s $6 million private placement preference share issue - designed to finance the build-out of its Cable Beach and airport stores - it was doing around $40 million in annual turnover.

It is unclear if that figure applies just to Wendy’s, or included Marco’s Pizza, too, but the former chain is understood to be well ahead of both Burger King and McDonald’s in terms of market share.

Still, Mr Watchorn yesterday exuded optimism that Carl’s Jr would have little trouble establishing itself in the Bahamas.

“We’re quite confident it’s going to be quite easy,” he told Tribune Business. “The Bahamian public love new items. New businesses tend to do quite well here, and get an initial surge.

“We think there is a market for something new, something fresh and something different, and are confident we will present a product and service which will allow us to build up the brand in a pretty short period of time.”

As for AML Foods’ internal projections for its Carl’s Jr franchise, Mr Watchorn said: “In terms of turnover we think that once we establish our chain to a level of five stores, we will be generating somewhere between $15-$20 million annually.

“That’s probably a five-seven year programme, realistically, to do that.”

Given that the first Carl’s Jr outlet, at 3,000 square feet, will be the Bahamian “flagship” location, Mr Watchorn said other outlets could be “a little smaller” - something that also influenced potential staff levels.

Suggesting that the BISX-listed group was “probably looking at around 50 people per store”, Mr Watchorn said Carl’s Jr would probably employ between 200-250 persons in total once it reached the five-store stage.

Disclosing that AML Foods currently employed “just over” 800 staff group-wide across its Solomon’s SuperCentre, Cost Right, Solomon’s Fresh Market formats, plus the franchise division, Mr Watchorn said the Fresh Market store at Harbour Bay and planned Carl’s Jr expansion would take it to 1,200 employees ultimately.

“By the time we get Fresh Market and Carl’s Jr established, we will have 1,200 employees, making us a large employer,” Mr Watchorn told Tribune Business.

“I think we’ll be a significant player. No one knows how big the food market is. With us being the only public company, no one else has to reveal their sales.

“But, obviously, with the level of sales expected, and the size and number of locations, we will be an influential factor in the market.”

AML Foods earlier this year told Tribune Business the addition of a Solomon’s Fresh Market at the Harbour Bay Shopping Centre would take it to $145-$150 million in annual group sales by the close of its 2014 financial year.

And that could ultimately rise to $160-$170 million through the expected contribution from Carl’s Jr.

The addition of Carl’s Jr further bolsters AML Foods’ position as a leading player in the Bahamian fast food franchise market. Its main competitor is Aetos Holdings, the company headed by Chris and Terry Tsavoussis, which operates the Wendy’s and Marco’s Pizza franchises in the Bahamas.

AML Foods and Aetos Holdings are now positioned to go head-to-head for dominance, as both now have a burger and pizza franchise. The other major player is George Myers’ Myers Group, which runs the likes of Kentucky Fried Chicken (KFC).