Collins Foods Accelerates German Expansion with 70 New KFCs Planned
Collins Foods unveiled ambitious growth plans at its 2025 Investor Day, spotlighting rapid expansion in Germany and operational enhancements in Australia and Europe. The company reaffirmed its FY26 profit growth targets, underpinned by digital innovation and brand modernization.
- Plans to open 40-70 new KFC restaurants in Germany over five years
- FY26 underlying NPAT growth target in low to mid-teens percentage
- Digital and operational investments driving improved customer experience
- Comparable store economics between Germany and Australia
- Focus on disciplined capital management and profitable growth
Strategic Growth Focus on Germany
At its 2025 Investor Day, Collins Foods Limited (ASX – CKF) laid out a clear vision for accelerated growth, with Germany emerging as a key strategic pillar. The company plans to significantly scale its KFC footprint in the country, targeting between 40 and 70 new restaurants over the next five years. This aggressive expansion aims to capitalize on Germany’s large, underpenetrated quick service restaurant (QSR) market, where KFC currently holds a modest share compared to competitors.
The German market offers a substantial opportunity, with over 80 million consumers and QSR growth outpacing GDP. Collins Foods is leveraging this by combining new restaurant openings with acquisitions to broaden its geographical presence, particularly in populous states like North Rhine Westphalia and Baden-Württemberg.
Operational Excellence and Digital Innovation
Beyond expansion, Collins Foods is investing heavily in operational excellence to enhance customer experience and margins. Digital initiatives, including kiosk rollouts and app-driven personalised offers, have boosted digital sales to 42% of total transactions, up 8% year-on-year. The company’s focus on efficient restaurant design, AI-powered forecasting, and labour optimisation tools is driving productivity gains.
In Australia, Collins Foods continues to modernise its KFC brand with new restaurant formats, remodels, and menu innovation. Early trials of new beverage offerings and delivery fee strategies have shown promising results, with transaction volumes and customer satisfaction metrics improving notably.
Financial Outlook and Capital Discipline
Collins Foods reaffirmed its FY26 outlook, targeting underlying net profit after tax growth in the low to mid-teens percentage range. The company emphasised maintaining a strong balance sheet and disciplined capital management, ensuring capacity to invest in profitable growth opportunities. Consistent, fully franked dividends remain a priority, reflecting confidence in cash generation and operational momentum.
Store economics in Germany are already comparable to Australia, with average annual revenues around $4.4 million and EBITDA margins exceeding 21%. This underlines the viability of the German expansion strategy despite the market still being in a growth phase.
Positioned for Long-Term Success
Collins Foods’ Investor Day presentation highlighted a company executing effectively on its strategy, with strong brand metrics and improving operational performance across its core markets. The combination of organic growth, acquisitions, and digital transformation positions Collins Foods well to capture future opportunities in both Australia and Europe.
As the company accelerates its German footprint and continues to innovate in Australia, investors will be watching closely to see how these initiatives translate into sustained profit growth and market share gains.
Bottom Line?
Collins Foods’ bold German expansion and operational upgrades set the stage for a transformative growth phase.
Questions in the middle?
- How will Collins Foods balance rapid German expansion with maintaining profitability?
- What impact will digital and menu innovations have on customer loyalty and sales growth?
- Could acquisition opportunities in Germany accelerate or alter the current growth trajectory?
