Taco Bell accelerates rollout despite Mexican stand-off

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The Taco Bell restaurant in the Brisbane suburb of Annerley.Dylan Evans

Fast-food giant Collins Foods will open its first Victorian Taco Bell restaurants in Hawthorn and South Yarra as it accelerates the chain's rollout despite a looming legal dispute with similarly named rival Taco Bill.

The ASX-listed food group, which also controls KFC Australia, has leased a store at 352 Chapel Street and another venue at 650-652 Glenferrie Road in Hawthorn.

Collins Foods’ managing director Graham Maxwell, briefing investors this week, said both outlets were expected to open “imminently” and follow the group opening its fifth Taco Bell restaurant in Queensland, with a further two in the pipeline for that state.

“New restaurants continue to have strong openings and we will shortly be opening our first two restaurants in Victoria,” he said.

The group, which operates the KFC brand in Europe and has rights to Sizzler in Australia and Asia, was targeting 20 new Taco Bell restaurant builds in calendar year 2020, he said.

Because of its expansion, Collins Foods is facing a Mexican stand-off in the Federal Court with another food purveyor, Taco Bill Mexican Restaurants Australia.

The Victorian-based chain has issued proceedings claiming deceptive and misleading conduct on Taco Bell’s behalf in a bid to stop it opening stores in Victoria and Albury, NSW.

Taco Bill operates 30 stores around the state and claims Australians will believe that the rival Taco Bell restaurants are associated with its business.

Collins Foods purchased the rights from Taco Bell’s American giant to operate the chain in Victoria, Queensland and Western Australia. New Zealand-based Restaurant Brands owns operational rights in New South Wales, the ACT and New Zealand.

The chain’s new South Yarra store is expected to open later this year in a 320 square metre fully fitted space leased through Fitzroys agents James Lockwood and Lewis Waddell.

Mr Lockwood said Taco Bell would capitalise on a boost in food and beverage spending in the area that has followed a period of intense residential development in nearby Forest Hill.

Gorman Commercial’s Tom Maule brokered the deal for Collins Food’s lease over a 148 square metre store in Hawthorn where it will pay rent of $150,000 per annum net.

“The rental reflected a rate of in excess of $1000 per square metre which is incredibly strong and promising for the current retail climate,” Mr Maule said.

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The proximity of Swinburne University is a drawcard for hospitality businesses.

Swinburne University was a major drawcard for any hospitality business looking to set up in the strip, he said.

Collins Foods reported half-year revenue for October 13 of $448.8 million, up 9.2 per cent, and its statutory net profit after tax was up 12.1 per cent to $24.1 million.