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Canada’s richest Australian says if you make a buck, invest a buck

Written by : Barry Critchley
2010-02-15
Listen to your father. Jack Cowin did and ended up as one of Canada's most successful entrepreneurs and one of the 100 richest Canadians. But he achieved that success after moving to Australia 41 years ago. Mr. Cowin made his money in fast food, initially with Kentucky Fried Chicken before adding burger chain Hungry Jack's and Dominos Pizza. He expanded into food manufacturing and now exports to 27 countries. His companies - 49 KFC outlets and 335 Hungry Jack's stores - employ 17,000 people, generate $1.2-billion in revenue and have a book value of $400-million.

Chances are that Mr. Cowin, who was selling life insurance for London Life before moving to Australia, wouldn't have thought of that country had his father, an executive with Ford Canada, not been posted down under. When his dad returned to Canada, he told his son: "If I was starting out now I would head down to Australia. The opportunities are fantastic." Mr. Cowin heeded that advice, made a visit in early 1968 and put down a $1,000 deposit on a KFC franchise.

One year later, he either had to come up with $300,000 or lose his deposit. He rounded up the money from 30 individuals for a 35% stake. That $10,000 investment is now, on a book value basis, worth more than $7-million - numbers Warren Buffett would be proud of. "It's been a great adventure," said the Sydney-based Mr. Cowin, who was in Canada this week for board meetings (he has interests in three North American companies) and to take in the Olympics. While in Toronto, the 67-year-old dual citizen spoke to FP's Barry Critchley, a transplanted Aussie.

Q Tell me about your early days in Windsor, Ont.

AI grew up there and went to school with Ed Lumley [a federal Cabinet minister in the early 1980s and now at BMO Capital Markets] and Paul Martin.

Q How about getting the $300,000?

A At that stage the fast-food business was just starting to grow. Part of the attitude was "if this guy was prepared to move half way round the world ... it was worthwhile to invest." Thank God for free enterprise, venture capitalism that gave somebody a chance.

QHow did you grow the businesses?

A We built it out of cash flow. One of the advantages of being a private company is that you don't have to distribute dividends. The toughest times were the mid-1970s, when interest rates were very high. In those days, the banks wouldn't lend you money. Because of that we had to grow internally - make a buck and invest a buck.

QWhat are your thoughts on going public?

AThere is a lot to be said for being independent. The big problem with a lot of public companies is that they get driven by the next announcement, so you make a lot of short-term decisions. With a private company you don't have this need to keep the share price front and centre - there is no share price. So the focus is on the right, long-term interests of the business.

Q What's the cost of a franchise?

A The minimum would be $800,000, but you and I are too old to do what's required. Of the 335 Hungry Jack's outlets, 70 are franchised.

Q How would Tim Hortons do in Australia?

AAustralia has never had a donut culture. As for coffee, it's a big business in Australia - it's cappuccino and lattes and expensive. You would need a point of difference. Tims, on the other hand, is a religion here [in Canada].

QWhat about the Australian business environment?

A Australia has missed the recession and the global financial crisis. As with Canada, the banking sector has not missed a beat. The financial system is sound. We like patting ourselves on the back as to how well Australia has done, but the reality is that we sit on the doorstep of two of the fastest-growing countries in the world - India and China. We are recipients of that growth and that keeps Australia ahead of the curve. The Australia economy has had very strong growth for the last 20 years and continues to grow.nt to do business. There is a kind of energy about the place that is contagious. Also, there you get a much better idea of the world. It's an international sort of place. [In Canada] we are dominated by what happens in the United States.

QWhy did you stay?

A We used to come back once a year in August and it was good. One year we came back at Christmas to whiteouts, cars in the ditch, having to bundle up and my kids asked, "Does the government make people stay here?" If you had a free choice and no complications, would you choose here?

Q Your company sponsors an Aussie rules team. And you came from a hockey-crazed country. What's the best game?

A On an overall skill basis, athleticism, Aussie rules. You need to run, kick, be tackled and bounce up. It's a combination of basketball, rugby and football. And, regardless of your size or

Australia is an entrepreneurial place with 22 million people. I come back here and everything is big companies and you don't know who owns what. Down there, you know who owns what, who is doing what. With smaller companies, you can get things done. It's a "can-do" place. There is a positive attitude

weight, different guys can play the game. The key ingredient in hockey is your ability to skate. If you can't skate you can't play the game.
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