David Novak. ©Gulf News
The chairman and chief executive of Pizza Hut, KFC and Taco Bell's parent company, Tricon, enjoys watching his restaurants generate more than $1 billion in cashflow a year. But privately, David Novak lives by more of a "breakeven" programme.

Novak's philosophy is simple: as the head of three popular restaurant chains, he is obliged to eat out - a lot! So, to stop his waistline from expanding as quickly as his company's bottomline - he runs.

But it is not just Tricon's profits that are rapidly growing, so are its restaurants on a global and regional scale. With 500 restaurants in the Middle East, Novak says the region is an important market with promise for tremendous growth. He plans to have between 300 and 500 more restaurants in the region in about five to seven years. This level of expansion is dependent on Iran and Libya opening up.

Tricon's four biggest markets here are Egypt, Saudi Arabia, Kuwait and the UAE. On a smaller scale it is Qatar, Bahrain, Oman and Jordan. This year, the company plans to open another 55 KFC and Pizza Hut restaurants in the region, and plans another 60 next year.

The UAE has 43 KFC and 35 Pizza Hut outlets. In the next two years, another 15 will open, but the split has not been decided. Novak said it cost between $600,000 and $700,000 to set up a restaurant, excluding real estate, which could set franchisees back anywhere from $500,000 to a $1 million on a lease basis.

In the Middle East, the Americana group is the dominant franchisee. Novak said 30 years ago they opened a KFC in the region and now they have over 300 restaurants.

While he acknowledges the economy has "slowed down a bit", it does not affect his business. "The industry is a bit soft but our market share has gone up. But it is nothing that we are really concerned about - our business is economic-proof because people have to eat, and our food is affordable and accessible."

The company's biggest competition on a global scale is McDonalds. But regionally, he pushed aside comments that Pizza Inn is a serious threat: "Pizza Inn is not really a significant threat. We do not take competition lightly, but our job is to focus on what customers want."

While Middle East residents enjoy eating out and consume almost the most chicken per capita in the world, the company chief feels they are not ready for spicy Mexican dishes. "We have no plans to open Taco Bell in the UAE because it is too much of a niche market - the taste of Mexican food is too unfamiliar."

But he did not rule out plans for a Taco Bell in future, after possibly five years. Tricon was formed when it was spun off from Pepsico in 1997. Since then its performance has been strong with stock prices rising from $30 to $40.

Since the spinoff, the company's operating earnings per share have doubled and operating profits increased 38 per cent. "We are not satisfied, but we are convinced that we are building the groundwork for stronger performance."

Novak, who joined Pepsico in 1986 in a marketing role, is confident that his company "is a good business, and it is only going to get better". From working his way up the ranks, he believes he understands what is important to his employees. Encouraging and rewarding his staff is important.

He spends almost two months a year doing leadership programmes. A lot of time is also spent travelling, and he is out of his office "well over 60 per cent of the time".