Australian Fast Foods Pty Ltd (AFF), owner of the Red Rooster and Chicken Treat retail chains, has struck a $180 million management buyout deal for its 450 outlets in Australia and New Zealand.
The buyout is in partnership with Quadrant Private Equity and AFF's current managing director Frank Romano, along with other key management.
Quadrant Private Equity managing director Chris Hadley said the pair plan to significantly grow the number of restaurants, mostly focusing on expanding the Red Rooster brand in Australia.
"The plan is over a three or four year period to grow the number of restaurants from circa 450 to about 600," Mr Hadley told AAP.
"That will be the focus and we plan at some point to list the business on the ASX."
AFF has about 450 outlets, including more than 310 company-owned outlets and 140 franchise outlets across the two brands in both markets, making the group the largest company-owned chicken fast food retailer in Australia.
AFF acquired the Red Rooster business from Coles Myer Ltd in 2002, having sold the Big Rooster chain to Coles in 1992.
Mr Hadley said the deal is about backing the existing management, and it is not a highly geared transaction, as there is $110 million debt, leaving $70 million equity.
Mr Romano, who will maintain a significant interest in the ownership structure, said the deal positions the company to achieve its next phase of growth, including potential strategic acquisitions.
"We don't have a franchisor to report to, so it makes franchising much easier from our part," he said.
"That is going to be our biggest growth area."
Mr Romano would not discount offshore opportunities but he said the biggest growth potential is Red Rooster in the Sydney metro area, while Victoria is the company's second focus.
"The overseas market is there for us and we have a registered trade mark in a number of countries, and we are talking to a number of countries, but our plan in particular in the short-term is to be the right player in Australia," he said.
"We should be the number one player in Australia, so we have some work to do."
In the fast food sector, Red Rooster and Chicken Treat combined share a fourth place rating with Hungry Jacks, while McDonalds, KFC, and Subway take one, two and three, respectively.
With obesity and trans fatty acids a major health issue around the nation, Mr Romano said AFF is well placed to deliver a healthy choice to consumers.
"We are probably the best placed brand in Australia to provide consumers the most healthiest alternatives," he said.
"I mean no fast food is going to be healthy, but it will be the healthiest alternative, and we have a good product range that will be rolled out."
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