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Issue Date: October 15, 2006 issue, Posted On: 10/16/2006


Agadi drives Church’s Chicken past $1 billion sales

By Martin Desmarais

 

Harsha Agadi, CEO of Church’s Chicken, has pushed the chain toward the top of its segment and has also increased its focus on international expansion.

ATLANTA — Measuring Harsha Agadi's influence on Church's Chicken is not a difficult task. All he has done since joining the chain is push it over the $1 billion mark and turn it into one of the largest quick service chicken concepts in the world.

The Atlanta-based Church's Chicken International, of which Agadi is president and chief executive officer, has 1,600 locations in 16 countries, including Puerto Rico. The chain serves traditional southern and spicy friend chicken.

According to the company, the goal is to double its size in the next five years and hit $2 billion in annual system-wide sales.

Agadi joined the chain in 2004, when it was acquired by the Atlanta-based private equity firm Arcapita. Agadi's GHS Holdings LLC, a consulting firm focused on the restaurant industry, is a co-investor in Church's.

With over 20 years in the restaurant industry, Agadi was a strong choice to take over the reigns at Church's.

His first move was to revise the brand's menu to focus on "spicy" products. Church's introduced two new main menu items — spicy bone-in chicken and its spicy chicken sandwich. The brand also renewed its focus on marketing and made a push to become an "urban brand."

Agadi also said that it was crucial for Church's to push the concept of the brand as quality food for a great value.

The moves paid off and, in addition to generating $1 billion in sales, Church's is second only to KFC in the quick service chicken market.

"We have done phenomenally well in growing the business," Agadi said. "We have become fiercely competitive in the market."

Founded in San Antonio, Texas in 1952, Church's grew to 500 locations in 22 states by the mid-1970s and became a $100 million company. In the early 1980s, the concept expanded internationally with locations in Puerto Rico, Canada, Mexico and Indonesia, among others.

Still only in about 30 states, Agadi said one of the reason he was interested in becoming involved with Church's is that the brand has great potential to expand both domestically and abroad.

The chain is schedule to open 120 stores this year, according to him. Church's just opened a store in the Philippines and will soon open a store in Saudi Arabi. International expansion is also slated for India, China, Japan and the United Kingdom.

"I truly believe Church's will do quite well overseas," Agadi said.

"We want to move into the growth areas in India and China," said Kenneth Cutshaw, Church's executive vice president and general counsel. "We are speaking to a number of people who are looking to expand the brand to those countries."

Cutshaw is responsible for Church's international development. He joined the brand in February from global law firm Holland & Knight LLP, with experience in commercial and global business, as well as public law, trade law and general business. He has held various international trade management positions at the U.S. Department of Commerce. He also has experience in the restaurant industry, having owned several restaurant enterprises and is involved in several companies with the Kochar Group in India.

Cutshaw serves as honorary counsel for India in the United States.

According to him, the success of the Church's brand is a great stepping-stone for additional international growth. "We have a very solid food product with our chicken, but we also have a very good record of localizing our product," he said.

Cutshaw is also banking on the Agadi's leadership to push the brand to the next level.

"I was attracted to Church's because of Harsha," said Cutshaw. "In my opinion, Harsha is a leader in the food and beverage industry, which is certainly proven by years of accomplishment."

"His experience will help with global expansion — we are relying on him," he added.

Agadi came to the United States from India in 1984 with a bachelor's degree from the University of Bombay. He attended Duke University and received a master's degree in business administration.

He then got a job with Kraft General Foods, which led to a position at Pepsi. "Pepsi was really what gave me the experience and interaction to the restaurant industry," he said.

Agadi also served as president and chief operating officer of Little Caesar Enterprises Inc. He led major restructuring and improvement efforts at the company and helped it regain the top position in the carryout, pizza market.

With Domino's Pizza, Agadi helped the chain increase from 600 locations to 1,800 stores and also guided the launch of its international expansion.

In 2000, Agadi started GHS Holdings to provide consulting and accounting services to the restaurant industry. GHS also helped private equity firms investing in the franchise and restaurant industry. According to Agadi, he was looking for a restaurant company to invest in through GHS, which led to a connection with Arcapita and Church's.

Agadi credits his success to some of the executives who have mentored him at former jobs, like Pepsi. "The advantage that I have had, and fortune, is related to the fact that I have worked for incredible people in my career," he said.

For Agadi, the corporate end of the franchise industry was the perfect fit from the start, due to his passion for the overall picture and pushing the growth of a brand. "My interest has always been to be a franchisor," he said. "Franchisees know how to make money — probably more than franchisors — but franchisors truly know how the brand will travel."

Though Indian Americans have made significant inroads in the franchise industry, as owners and operators, few have risen to the executive level of large chains, as Agadi has. However, he believes that this will change.

"Somebody has to start, somebody has to be a trailblazer," he said. "My prediction is that more will come."

"Over time, more and more Indians will get attracted to the management on the franchisor side," he added.

For now, though, Agadi and Church's are more than happy to work with Indian Americans and South Asians in the franchisee capacity. According to Agadi, half of Church's franchisees are South Asian.

In addition, he said, half of the 35,000 employees that work throughout the chain are South Asians.

One of the top South Asian franchisees is the Chicago-based Aslam Khan, who came to the United States from Pakistan 20 years ago, started as a hourly worker at Church's and now owns 105 stores in the United States.

The success of South Asians — and the success of Church's franchisees in general — really has the chain looking within for growth. In fact, earlier this year Church's launched a specific campaign to encourage existing franchisees to sign agreements to open more restaurants. Current franchisees receive $5,000 from Church's for each new store.

Agadi calls franchisees "sterling entrepreneurs" and sees no reason not to turn to them to help propel the chain's growth. "It is easier and simpler for us to focus and recruit from within," he said.









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