American fast-food staple Taco Bell will take a serious tilt at the Australian market in the coming years with plans to open as many as 50 stores amid growing interest in Mexican cuisine Down Under.
The move follows a toe-dip trial in Brisbane last year which tested local appetite for the brand in Brisbane under the watch of listed franchise specialists Collins Foods Group.
It will be the brand’s third crack at the Australian market, after trying to expand here unsuccessfully in the 1980s and 1990s.
Three Australian states are covered under a local development agreement for the brand between Collins and American owner Yum! Brands, which will see 50 locations opened between 2019 and 2021.
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There will be three stores trading in Queensland by the end of 2018 — in Robina, Cleveland and North Lakes — before the business crosses state lines next year.
Taco Bell is a fast-food juggernaut in the United States, operating more than 7,000 stores and serving over two billion customers each year.
Collins Foods will now attempt to replicate at least part of that success in Australia, after what it has described as a successful trial.
“We have seen tremendous enthusiasm for the Taco Bell brand in Australia,” Collins Foods’ managing director and chief executive Graham Maxwell said in a statement.
“We believe in the significant growth potential of Taco Bell.”
Third time’s the charm?
Taco Bell will look to capitalise on an increase in the popularity of Mexican cuisine in Australia, which has also helped drive the growth of brands such as Guzman Y Gomez, Mad Mex and Zambrero in recent years.
IBISWorld industry analyst Bao Vuong believes Taco Bell’s third go at the Australian market will likely be more successful than previous attempts.
“This time they’ll be more successful, international cuisines have gained more popularity in Australia over the last five to 10 years,” he tells SmartCompany.
“The Australian market is still quite untapped.”
Vuong says Taco Bell’s arrival could signal further pain for brands and franchisees in more traditional fast-food verticals, such as burgers and pizza, as competition in the quick-service restaurant space continues to heat up.
Gary Mortimer, associate professor at Queensland University of Technology, says Taco Bell will look to tap into the value side of the market where others have yet to tread.
“While we’ve seen growth in fast casual dining with Mexican style franchises such as Guzman Y Gomez, there is clearly still an appetite for good value big Mexican meals,” he tells SmartCompany.
“This will be a plug-and-play situation. The model has worked successfully in America: big meals low prices,” he says.
Collins Foods are also a safe pair of hands, Mortimer says, having had ample experience in the Australian market with other Yum! owned franchises such as KFC.
The business operates franchise operations for 225 KFC stores in Australia.
Taco Bell’s initial expansion will likely take it to NSW and Victoria next, Mortimer believes, with outer suburban areas likely to be targeted.
“It will be outer-lying working-class suburbs where there’s a demographic lean towards value [and] convenience,” he says.
Queensland was selected as the first market for “the people, the lifestyle, the laidback-ness” a spokesperson said last year.
“It’s our own Cali Down Under,” they said.