Thursday, November 12, 2009

Can Indonesia's "Hamburger King" topple McDonald's?

For full story please visit the original source: GlobalPost/ Sara Schonhardt

Would you buy a burger from a one-eyed pirate named Toni Jack? That's the hope of one Indonesian entrepreneur, whose roguish answer to Ronald McDonald also claims his burgers are “better than that one.”

The slogan is Bambang Rachmadi’s attempt to differentiate his new brand from the world’s largest hamburger chain – a company he held majority rights to until McDonald’s sold his stake in March.

Bambang, the self-described hamburger king of Indonesia, claims he was not notified of the sale of his $135 million in assets, which a company spokeswoman described as “personal." He is pursuing legal action against the corporate behemoth.

In the meantime, Bambang has transformed his 13 owner-operated McDonald’s into Toni Jack’s, a step he said was necessary to save the jobs of about 800 employees.

So last month, a McDonald's in central Jakarta disappeared under a black tarp with the Tony Jack’s logo: a pirate whose hat bears a burger crossed by a fork and spoon.

The 97 McDonald’s restaurants that remain in Indonesia now belong to sole franchisee PT Sinar Sosro, producers of the country’s leading bottled tea brand. Sinar Sosro says it aims to open as many as 75 new restaurants over the next five years, which helps sweeten the new partnership

Toni Jack’s has continued that approach with a menu that — despite the lack of halal labeling — is nearly identical to McDonald’s. But according to company spokeswoman Tetty Hutapea, the taste is "different."

“The meat is not good, and there are fewer choices for burgers,” said Aouini Nabil, a security guard from Paris, while poking at the remains of the chicken burger on his tray. His fiance Rento Utami said Toni Jack’s seemed to draw fewer customers, particularly teenagers and tourists.

A Spanish Embassy worker who entered the restaurant thinking it was still McDonald’s said he was surprised by the change but decided to give Toni Jack’s a try because he was short on time. Although he finished his burger, he said the taste was "not great."

Others were more positive about the switch. Fransesko Laban, an employee with an international NGO, stayed to do some work after finishing his Chicken Jack meal. He said he prefers Toni Jack’s to McDonald’s because it is clean and smoke free.

Bambang also plans to open several new branches in the year ahead, with a goal to franchise the restaurant to other countries in 2014.

For now, spokeswoman Tetty Hutapea said it’s too early to gauge Toni Jack’s sales performance but said that business is “stable.”

The loss of 13 restaurants may not make much of a dent in the global presence of McDonald’s, which operates 31,000 around the world. But it doesn’t do much for the company’s image in a region where it has faced more than one legal tussle recently..