Americana Group: KFC in Mecca
Melodena Stephens Balakrishnan
Melodena Stephens
Balakrishnan is an
Associate Professor at
the University of
Wollongong in Dubai,
United Arab Emirates.
The author would like to
acknowledge the Academy of
International Business –
Middle East North Africa
Chapter for their generosity in
giving the cases to the
Emerald Emerging Market
Case Studies (EEMCS)
collection.
Disclaimer. This case is written
solely for educational
purposes and is not intended
to represent successful or
unsuccessful managerial
decision-making. The author
may have disguised names,
financial and other
recognizable information to
protect confidentiality.
DOI 10.1108/EEMCS-03-2015-0035
Once in a lifetime of every able-bodied Muslim, if it was within his means to do so, he must
make a pilgrimage to the Holy City of Mecca in the Kingdom of Saudi Arabia (KSA) – called
the Hajj. There are about 1 billion Muslims in the world. The period of Hajj changes each
year, as it follows the lunar calendar[1], and it lasts for just four days. Pilgrims arrive from
all over the world, and, generally, the government provides tents in the twin city of Mina. In
2011, it was estimated that 2.5 million Muslims preformed the Hajj, out of which 72 per cent
were from outside the KSA (The Telegraph, 2011)[2]. This pilgrimage is an annual
occurrence, happening since the past 14 centuries (Saudi Embassy, 2012). Besides the
number of pilgrims, the city of Mecca has an additional 63,000 security forces; 22,000 civil
defense forces; 20,000 health workers; and over 12,000 male and female guides known as
“mutawif” who help organize the pilgrims’ stay (The Telegraph, 2011).
The Umrah season happens all year round with peak during Ramadan. Ramadan is the
holy month of fasting which lasts for approximately 30 days, and the number of pilgrims
roughly doubles compared to the rest of the year during that time (Shaheen, 2011). Hajj is
undertaken normally 70 days after Ramadan. Only Muslims are allowed into the Holy City
of Mecca. To accommodate more pilgrims, Mecca is increasing the infrastructure. By 2025,
an estimated 17 million Muslims would visit Mecca (Butt, 2010).
The Al-Haram Kentucky Fried Chicken (KFC) restaurant is situated near the Al-Masjid
al-Hខ arām Mosque or the “The Sacred Mosque” or the Grand Mosque which surrounds
Islam’s holiest place, the Kaaba. It is the largest mosque in the world and can
accommodate 800,000 worshippers (Government of Saudi Arabia, 2012; Sacred
Destinations, 2012) . Pilgrims are normally the customers of this KFC branch because of its
location. This sheer volume and fluctuation in the number of customers could create severe
logistics problems for a fast food restaurant like KFC. The issues they have to plan for are
things like managing the supply chain, the staffing issues, operational efficiency, menu
planning and customer service times. They also need to be culturally relevant. In the quick
service restaurant (QSR), the expectation is the speed of delivery along with the
standardization of food. For Mohammed Khalifa, the Chief Operating Officer of Americana,
the largest master franchisee of Yum! Brand, these are issues he needs to consider, as
Mecca is growing and the number of pilgrims is increasing.
1. Yum! Brands
Yum! Brands, Inc., the world’s largest restaurant company in terms of system units had
more than 37,000 restaurants in over 117 countries and territories and more than 1 million
associates in 2012. It was ranked #214 on the Fortune 500 list, and it generated more than
US$12 billion in revenue in 2011. Their three key brands are KFC, Pizza Hut and Taco Bell
(Yum! Brands website, 2012).
VOL. 5 NO. 3 2015, pp. 1-15, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 KFC was founded in 1952 by Colonel Harland Sanders. It is the largest chicken restaurant
brand in the world, having 15,000 KFC outlets in more than 105 nations and territories,
serving nearly eight million customers around the world, every day. It was known as
Kentucky Fried Chicken before it was re-branded in the mid-1990s. KFC in the Middle East
North Africa (MENA) region is present across 12 countries and 74 cities and is operating
more than 500 restaurants. The brand in the region is supported by Yum! Restaurants
International (MENA, Pakistan and Turkey) Restaurant Support Center.

1.1 KFC, a quick service restaurant

KFC belongs to the QSR industry. The defining characteristics of this industry is a minimal
menu, fast delivery but limited service (customer is responsible to pick up his own food).
The commercial focus is on standardization of food in terms of taste, product safety,
uniformity and speed of service at a low cost. To ensure consistent delivery of food, there
had to be a strong supply chain and well-defined processing techniques to ensure quality
of the food at the QSR defined standards.
From the customer point of view, it is important to deliver on customer expectations. To
ensure this quality, KFC uses measurement and training guidelines called CHAMPS
(cleanliness, hospitality, accuracy of order, maintenance, product and speed of service).
Delivery standards are set on each standard. To maintain these standards, there is an
internal review process called the Champs Excellence Review and mystery shoppers.
Though all factors are equally important, two factors have a slightly greater focus; the first
is the product, as it is core to the customer value proposition, and the second is speed of
service, as this is a competitive advantage in the QSR industry.
Product is the core reason why the customer come to eat at a KFC restaurant. Product
quality has standards on aspects like taste, appearance and temperature. The back-end
operations which are used to manage these standards are intricate. The frozen chicken is
normally stored in commissaries before marination. The meat requires 48 hours for thawing
before being marinated and then it will have to be transferred to the chiller. This marinated
meat has to be consumed within 48 hours or it will have to be disposed. When the meat is
taken from a chiller, it requires a couple of hours to thaw and has to be cooked before the
48-hour disposal time. Before cooking, the meat needs to be breaded. The process of
breading takes around 2-4 minutes. The breaded chicken has to be stacked properly on
racks based on their size to ensure uniform cooking in the fryer. Cooking time is a maximum
of 7 minutes, and the oil has to be sufficiently heated up (normally fryers require about 30
minutes starting time). Following cooking, there is a 5-minutes staging time to cool the
chicken before it goes to the display or holding cabinet. The cooked food will be on the
display racks for a maximum of 90 minutes or it will be disposed. To manage product
quality and ensure profitability, there are multiple activities to be managed before the
customer receives piping hot KFC chicken.
Speed of delivery is considered an obsession measure in KFC because it belongs to the
QSR industry. Worldwide for KFC, speed of service had specific parameters. From the time
the customer enters the queue and from the time he walks away with his food, the standard
time set is at 5 minutes. From the time the customer reaches till the time he places the order
and walks away with the food, he should take no more than 60 seconds or a minute. For a
drive-through, order taking should be 60 seconds, and, at the service window or pick-up
window, they should take no longer than 1 minute. The total time from order to pick-up is
2 minutes and 30 seconds. For home delivery, order taking should take 60 seconds and
delivery to be within 30 minutes. This meant all the back-end operations need to be
pre-planned and there have to be hourly estimates of consumption to ensure that the
customers are serviced on time. The industry operates on trying to reach these exacting
standards, knowing it will not always be 100 per cent possible 100 per cent because of
demand fluctuation.

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 3 2015

This ability to predict consumption numbers not only affects the customer satisfaction but
also the operational costs in terms of lost customers (prediction numbers are lower than
demand) and wastage (prediction numbers are higher than demand). KFC has an in-house
system called Management Projection and Control (MP&C), which allows the Restaurant
Manager to see the last four-weeks” history of the consumption of the product by hour.
These data are used to help him decide how much product is needed to be cooked in
anticipation of demand. Till recently, all this information was manually entered, but, in 2012,
a pilot program was being tested to synch this information automatically[3].
To deliver product projection numbers are a function of many factors: number of tills
opened to take orders, number of staff working during peak meal times to cook, assemble
and pack products, number of fryers present in the kitchen and number of delivery drivers.
A single fryer can cook a maximum of eight heads of chicken (one head of chicken is nine
pieces). You require separate types of fryers for the original version (which is pressure
fried) and the spicy chicken (open fryer). A single cashier till, based on the standards set
for speed, should ideally be able to take 60 customers, but, in reality (as customers also
take their time choosing the menu), it would be able to serve about 35 customers.
For MENA countries, especially in the Gulf Cooperation Countries (GCC), labor costs are
lower than those in developed countries because:
 the use of expatriate labor is high;
 there is low part-time labor;
 they often worked for fixed hours; and
 as the focus is on optimizing earnings for remittances back home, many workers will
also work overtime.
Food cost by contrast is more challenging as the focus is on ensuring timely supplies, low
wastage and high food safety standards (which all meant the company must have accurate
projection capabilities).
Chicken served in Arab countries must be halal. In GCC, most of the halal chicken is
imported from Sadia, Brazil. The chicken can take at least eight weeks to reach from Brazil.
For this region, based on customer preferences, 60 per cent of the chicken ordered is spicy
(by volume). There is a growing focus on sandwiches, and 45 per cent of transactions are
sandwiches in a normal store. Home delivery will often be double the value of a single order
at the store and will mostly be large meal bundles built around the iconic bucket.

2. Americana Group (Kuwait Food Company)

The Americana Group (Kuwait Food Company), a diversified company operating in the
MENA has businesses in the restaurant industry and in manufacturing consumer foods and
food-related products. Americana was founded by Mr Nasser Al Kharafi, as Kuwait Foods
in 1964 as a small trading company (see Exhibit 1 for Mission Statement). They opened
their first restaurant (Wimpy) in 1970. Today, it is publicly traded on the Kuwait Stock
Exchange (FOOD.KW). The Americana Group has activities across 13 countries in the
MENA region (Exhibit 2), a payroll of over 55,000 employees from 21 nationalities, 17
factories and has products distributed in over 50 countries. The Americana Group’s
consumer food portfolio included ten consumer food brands in the categories of meat and
poultry, canned food, dairy foods, frozen potatoes and vegetables and salty snacks.
In 2012, they had established a network of over 1,300 restaurant outlets, becoming the
largest operator of restaurant chains in the MENA region and one of the most successful
franchise operators in the whole world. They were the master franchises for Yum! Brands’
KFC and Pizza Hut. They were master franchisees for TGI Friday; Krispy Kreme; Hardee’s;
Costa Coffee; Baskin Robbins among others. In addition, the Americana Group created six
of its own homegrown brands, which have proven to be as successful with consumers as

VOL. 5 NO. 3 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

 their global counterparts (Exhibit 3). In 2012, Americana had sales revenue of USD 2.6
billion and profits of USD 173 million. The KFC concept was introduced to the Middle East
region by Americana when the first KFC store was opened in Kuwait on September 25,
1973. For Yum! Brands, Americana operated 70 per cent of their 1,350 restaurants (KFC
and Pizza Hut) across the region and were among the largest franchisee of Yum! outside
of the USA.
KFC in Arabia has been coming up with innovative product items. They maintained touch
with the customer through social media (Web site: www.kfc-arabia.com, Twitter, Facebook
and YouTube – see Exhibit 4) TV and print advertisements and sponsorship of events like
football (FC Barcelona, Messi see Exhibit 5).

3. Al-Haram KFC store, Mecca

The Al-Haram KFC Store in Mecca was opened on April 26, 1994. The KSA at that time did
not allow portrayal of people in any advertisements. The KFC emblem which is a drawing
of Colonel Sanders is not permitted on posters and on the store, as images of people are
still not allowed (Shipping International, 2012) in Mecca and a couple of other cities like
Medina in the KSA (Exhibit 6). However, it is allowed in packaging (Luqmani et al., 1983).
From 1994 to 2012, the average customer ticket number[4] per day at the Al-Haram KFC
had doubled. During Hajj, the average ticket number per day went up by 1.5 times of a
normal day. Worldwide average for a KFC restaurant is 250 orders a day with a majority of
customers being served during a two-hour peak period.
The Al-Haram store is situated right next to the Sacred Mosque, the holiest site in Mecca
and Islam that houses the Kaaba which is the main pilgrimage site (Exhibit 7). There are
several operational issues that made the running of the KFC restaurant in Al-Haram unique.
First, as only Muslims are allowed in Mecca, the staff and all management must be of
Muslim faith. During Hajj, the Americana redeploy manpower from other restaurants to the
Al-Haram store. They have to provide additional labor with suitable accommodation for
them and train them to work during Hajj. The normal operational hours of the store is from
10.00 to 1.00 a.m.; during Ramadan, it is from sunset to 4.30 a.m. and during Hajj the store
is open 24 hours.
In the KSA, there is a separation of adult genders, and this meant there are separate
queues for men and women for ordering. The store had three counters, and this meant
three separate tills were dedicated for a ladies line (Exhibit 8). As of 2012, Al-Haram KFC
had only men working there. However, for the first time in 2012 in the KSA, women were
being hired in the call centers as part of the Saudization process. The Americana is
planning to employ 100 women in the call centers and another 50 for fine dining stores (Al
Arabiya, 2012).
Muslims pray five times a day and, by law, during this time all work must stop. When prayer
is called, every business will close for about 20-30 minutes. The whole year round (except
during Ramadan), patrons will come to eat between prayers. The demand fluctuates,
peaking during Ramadan. During Ramadan, Muslims who have been fasting from sunrise
will eat only after the breaking of the fast at sunset. This puts a tremendous pressure on the
store for service. During Hajj, when the orders are 1.5 times the normal ordering quantity,
a simplified menu is created to manage operations (see sample of the menu in Exhibit 9).
There are no sandwiches offered at the Al-Haram store, as sandwiches are labor intensive.
The design of the menu and mupi poster shows the names and components of meals in
three languages (Arabic, English and Urdu). Payment is only in Saudi riyals at the Al-Haram
store, and the price is rounded to be change friendly. In other parts of the MENA region like
UAE, payment is taken in multiple currencies.
To manage the incredible volume of food that is prepared, the Americana has redesigned
the kitchen. The kitchen spreads over two floors. The top floor has most of the fryers. The
food is cooked, pre-packed and sent down a chute to the ground floor, removing the need

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 3 2015

 for a display rack on the ground floor to optimize space (Exhibit 10). The pre-packaging of
the meals helps in anticipation of the demand. Another innovation implemented is
separating the ordering and delivery queues. This increases the order numbers to almost
double. This is called the fusion system and is designed for high-volume stores.

4. KFC – redefining the high-volume QSR industry

Mecca is expanding. The pilgrim numbers during 2011 were about 2.5 million and this is
expected to touch 17 million by 2025. This meant that the demand for KFC will jump
significantly by 2025. What other opportunities are there for KFC to grow? 80 per cent of
travelers come by air to Jeddah, and during Hajj, the number of flights peaks at 500-600
flights daily. You travel from Jeddah to Mina by coaches (buses) or by train. There is a
checkpost outside Mecca, as only Muslims are allowed in the Holy City. During Hajj, the
density of pilgrims increases to 5-7 people per square meter (Hajj Management). How can
KFC redefine the high-volume business in this context even more? What are pilgrims
looking for in terms of value? For Mohammed Khalifa, the Chief Operating Officer of the
Americana, the largest master franchisee of Yum! Brand, these are issues he needs to
consider, as Mecca is growing and the number of pilgrims is increasing.

Notes
1. It occurs on the 8th to 12th day of Dhu al-Hijjah, the 12th and last month of the Islamic calendar.
Keywords:
2. Every Muslim country has a Hajj quota of 1,000 pilgrims per million inhabitants.
Strategy,
Marketing, 3. There is an adaption lag in adopting new technologies between equity markets (markets where
company owns the restaurant) and franchise markets.
Service marketing,
International business, 4. Source: Internal, available at: www.americana-group.net/portal/about_us/our_history.aspx
Logistics 5. A ticket number is the number of receipts issued per day.

References
Al Arabiya (2012), available at: www.alarabiya.net/articles/2012/06/19/221473.html

Butt, R. (2010), “Mecca makeover: how the hajj has become big business for Saudi Arabia”,The
Guardian, available at: www.guardian.co.uk/world/2010/nov/14/mecca-hajj-saudi-arabia (accessed
14 November).

Government of Saudi Arabia (2012), “The two holy mosques”, available at: www.info.gov.sa/portals/
kingdom/Mosques.html
Hajj Management, available at: www.hajjmanagement.com/index.php?option⫽com_content&view⫽
article&id⫽22&Itemid⫽29

Luqmani, M., Yavas, U. and Quraeshi, Z. (1983), “Advertising in Saudi Arabia: contentand regulation”,
International Marketing Review, Vol. 6 No. 1.
Sacred Destinations (2012), “Al-Masjid al-Haram (The Holy Mosque), Mecca”, available at: www.
sacred-destinations.com/saudi-arabia/mecca-haram-mosque

Saudi Embassy (2012), available at: www.saudiembassy.net/issues/hajj/

Shaheen, A.B. (2011), “Pilgrims flock to Makkah and Madinah ahead of Ramadan”, Gulf News,
available at: http://gulfnews.com/news/gulf/saudi-arabia/pilgrims-flock-to-makkah-and-madinah-
ahead-of-ramadan-1.838021 (accessed 13 July).

Shipping International (2012), “Customs regulations in Saudi Arabia”, available at: http://saudi-arabia.
shipping-international.com/customs/ (accessed 7 July 2012).
The Telegraph (2011), “Hajj pilgrimage 2011: by numbers”, available at: www.telegraph.co.uk/news/
worldnews/middleeast/saudiarabia/8867639/Hajj-pilgrimage-2011-by-numbers.html (accessed 31 May).

Yum! Brands website (2012), available at: www.yum.com/ (accessed 9 July 2012).

Further reading
Ministry of Hajj, available at: www.hajinformation.com/main/m80335.htm

VOL. 5 NO. 3 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

 Exhibit 1. The Americana mission statement and core values

Figure E1

Exhibit 2. Americana’s operating markets

Figure E2

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 3 2015

Exhibit 3. Milestones in history[5]

Figure E3

Exhibit 4. KFC Arabia Web site

Figure E4

VOL. 5 NO. 3 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7

 Exhibit 5. Messi 2010 promotion

Figure E5

Exhibit 6. Al-Haram store – poster of product without the KFC mascot

Plate E1

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 3 2015

Exhibit 7. Location of the KFC haram restaurant in relation to the holy mosque

Figure E6

Exhibit 8. Separate queues for men and women for ordering

Plate E2

VOL. 5 NO. 3 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9

 Exhibit 9. Simplified menu

Plate E3

Exhibit 10. Special chute, holding cabinet

Figure E7

About the author

Melodena Stephens Balakrishnan is an Associate Professor at the University of Wollongong
in Dubai, UAE, and a Visiting Professor at the Karlshochschule International University,
Karlsruhe, Germany. She has over 20 years of industry and academic experience.
Melodena was awarded the UOWD 2009 and UOWD 2013 Teaching Excellence Award
and she was “Highly Commended” for the ITC Staff Awards – Australia (2012) for
“Exceptional Leadership by a Female Staff Member”. Melodena Stephens Balakrishnan
can be contacted at: MelodenaBalakrishnan@uowdubai.ac.ae

PAGE 10 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 3 2015