Hungry Jack’s owner Jack Cowin decries slow and costly building approvals

Hungry Jack’s boss Jack Cowin blames the slow, expensive construction regime for the failure of rivals, but he says his chain is robust and healthy – and will push ahead with expansion.

Hungry Jack’s owner Jack Cowin plans to build another 20 outlets this year.

Hungry Jack’s owner and billionaire Jack Cowin has slammed the slow, cumbersome and costly red tape delaying the construction new restaurants.

Mr Cowin said the cost of construction was reducing the profitability of many fast-food chains and leading some to collapse.

Mr Cowin, who opened his first Hungry Jack’s restaurant in 1971 and now has 470 nationwide, pointed to the recent collapse of US rival Carl’s Jr and said more restaurants could go to the wall.

He said rising costs of building and opening a store – much of it due to red tape and a sclerotic council approval regime – meant higher sales and profits were required in order to recoup the start-up investment.

“Time is one thing; the other thing is the cost of building, which has substantially increased,” the Canadian-born billionaire told The Australian.

“It is not easy in this country to get approvals.

“We see when we are building new stores the cost is going up.

“In our industry the Carl’s Jr business has just failed, I think largely because it just can’t deal with what the costs are if you don’t get the sales revenue.

“So you have to have the ability to pass costs as they come along.

“The cost of building new stores continues to increase and we’re hoping that that will come back somewhat from during Covid and things like that – the shortage of supplies – and it hasn’t come back as much as what we might have expected.”

Hungry Jack’s restaurants have had a 15 per cent increase in sales during 2024.

His comments came as Competitive Foods Australia, the corporate body that owns Hungry Jack’s, saw its sales leap to $2.365bn in 2024, up from $2bn in 2023.

Mr Cowin said while the cost of living might be denting sales growth for some fast-food chains as consumers saved money by eating at home, his burger chain looked to be “an anomaly” as it powered ahead.

In 2023 Hungry Jack’s sales hit $2bn for the first time. The privately owned Competitive Foods had flat net profit of $74m for 2024.

More than 80 per cent of its stores are company-owned.

As rivals such as Carl’s Jr collapse and other fast-food chains struggle, Hungry Jack’s plans to build as many as 20 new outlets this year.

“The approval process takes a long time. To be honest I don’t know why or how it takes so long but it does to get the council approval, main roads and everything else. It just takes a long time to get them moving,” Mr Cowin said.

Mr Cowin raised his start-up money for Hungry Jack’s from dozens of Canadian families in the early 1970s and turned that seed funding into the billion-dollar Hungry Jack’s empire. He is also the chairman and a large shareholder in Domino’s Pizza.  Mr Cowin said the 15 per cent sales rise for 2024 came from treating the customer well, ensuring a majority of his stores were company-owned rather than franchises, and properly incentivising store managers.

“We are fortunate to be enjoying healthy sales growth, unlike some of the competitors in the marketplace,” he said.

“At the end of the day, it comes down to execution and operations, and as a private company we have more control over the staffing and things like this, whereas a lot of the competitors are largely franchised, and if sales come off then they cut costs, they cut labour – things like that – so we believe in many ways, we feel fortunate that we’re getting good growth.”

He said the latest financial results for Hungry Jack’s were not indicative of the cost of living ­crisis.

“We are an anomaly,” he said. “And to be frank I think one of the factors that has helped our business is we have the highest-paid store managers in the industry, and they’re well bonused.”