1) An Australian company called Cone Heads opened the first international franchise of their hot chip stores in Lahore, Pakistan in 2014. 2) Cone Heads saw success in Pakistan by offering a premium product different than major US fast food brands, and adapting their menu to local tastes by adding spicier sauces and more chicken options. 3) Despite challenges like infrastructure issues and taxes, Cone Heads has continued to expand in Pakistan by establishing trust with local partners, adapting to the culture and market, and leveraging Australia's positive reputation in the country.

1. Australians take the humble hot chip to Pakistan
Case Study | Cone Heads
Melbourne company Cone Heads is feeding
Pakistan’s passion for eating out.
In June 2006, Gary Katos, a chef, fast food business operator
and consultant with more than 30 years in the industry,
opened the first Cone Heads store in Melbourne focusing on
freshly cooked hot chips and gourmet burgers.
Katos combined the traditional fish and chip shop with
innovative cooking technology to offer healthier versions of
classic take-away food.
The centre of the Cone Heads business is the not-so-humble
hot chip – made from premium potatoes cooked to order.
Cone Heads cooks the chips in 100 per cent vegetable oil free
of cholesterol, trans fat and genetically modified organisms.
They come in a cone designed to maintain flavour and
freshness, with a wide range of specialty sauces. And
Pakistan loves them.
Katos, CEO of Cone Heads Australia, franchised the concept
and in 2014 opened his first international store in Lahore,
Pakistan’s cultural and food capital.
Vibrant Brands International, the master franchisee of Cone
Heads in Pakistan, Thailand and the UAE, is establishing a
second store in Lahore and have opened a third in Islamabad.
It plans to open another 30 outlets in Pakistan as the market
grows.
Identifying niche markets
Cone Heads Pakistan prides itself on being different to the big
US fast food brands – a premium product that is suitable for all
ages and easy to eat on the go.
The interest for Cone Heads to launch in Pakistan came from
Vibrant Brands International Director, Mian Shaz. He tasted
Cone Heads in Melbourne, loved the concept and saw
opportunities overseas, particularly in Pakistan. Shaz
presented the idea to the Vibrant Brands team and four
months later Cone Heads opened its first international store in
Lahore.
Cone Heads has built a strong business in Australia by
perfecting its recipes and creating efficient store operations. It
has taken this same approach in Pakistan.
The Australian Cone Heads team spent three weeks in
Pakistan fitting out the launch restaurant, sourcing equipment,
developing the local supply chain and training the local team.
‘We’ve been flexible in accommodating the master franchisee,
including training and recipe development,’ says Katos.
Vibrant Brands Managing Director Bilal Muhabat says many
international quick-service food brands have entered Pakistan
in recent years, making the market much more competitive.
‘As industry insiders, we identified a niche for Cone Heads,’
says Muhabat. ‘We introduced the concept of premium hot
chips.’
Image: Cone Heads store in Lahore
‘This is an exciting time to consider
expanding your business into Pakistan.
Success comes to those who can offer
competitive pricing, consistent quality, and
unique products or experiences.’
Gary Katos, CEO, Cone Heads

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The Cone Heads philosophy fits a variety of business models
– take-away, dine in, drive-through, kiosk or food court. It has
affordable pricing to remain competitive and affordable start-
up costs for a better return on investment.
Adapting to the local market
Katos says Cone Heads has worked hard to build a trusting
relationship with its local partners and they regard each other
as family.
‘Transparency is everything,’ he says. ‘The team is motivated
and focused on sharing the same dream. Franchising
internationally creates many moving parts, so it’s vital to have
skilled people who are specialists for each part.’
To establish its presence in Pakistan, Cone Heads made
some cultural adjustments to its menu to suit the local palate,
such as providing spicier sauces made from local ingredients,
using more chicken than beef, and extending the range of
burgers from the five it offers in Australia to about 20 in
Pakistan.
Cone Heads also modified its store model to include a staff
prayer area and to appeal more directly to locals, since there
is little tourist trade in Pakistan.
When Cone Heads analysed the market, it found that the
average Pakistani regarded Western food as a luxury, so
Cone Heads introduced a new value menu line.
‘Our sales rocketed,’ says Katos. ‘People who had never been
able to afford this type of food now find it within reach. We
also launched our home delivery service.’
Australia’s positive reputation
Katos says it’s best to keep an open mind about doing
business in Pakistan, and to remember that Australia has a
positive reputation there.
‘Pakistan is not on the radar of most international companies
because of the perception people have of the market from the
media,’ he says.
‘However, it’s a giant country, with a young and fast-growing
population, an entrepreneurial spirit and a growing middle
class. It offers many business opportunities.
‘What works in Pakistan is listening to the advice of
experienced people and going with the flow. What doesn’t
work is prejudgment and a lack of understanding or respect for
cultural differences.
‘The Pakistani people I’ve met are genuine, friendly and very
welcoming. They see Australia as a country that accepts
multiculturalism.
‘They love western products, but it seems to me that anything
‘Aussie’ is their favourite. Australia has a very strong brand
image in Pakistan.’
Doing business in Pakistan
Katos says the Pakistani business sector and government are
fair, accommodating and will go out of their way to help.
However, there are some pitfalls, such as poor infrastructure,
energy shortages, higher taxes and some legal annoyances.
‘For example, Australian companies should be aware that
regulations can change without notice, and they build this into
their contracts to ensure there is flexibility to adapt and
change as needed,’ says Katos.
‘The power grid fails for hours on most days; they call this
‘load shedding’. We had to invest in an industrial generator for
each store.
‘The import duties and taxes are higher than in Australia, but
wages are lower. You get used to these differences and you
adapt your business model accordingly. It is what it is, and it’s
the same for everyone.’
Opportunities for Australian companies in Pakistan can be
lucrative – if they find a niche and offer the right product for
the right price.
‘Your company’s IP should be easy to systemise and
replicate,’ says Katos. ‘Local knowledge is paramount. The
team you decide to work with must have an existing
infrastructure and be given strong training in your product.
‘I only know of two ways to make money – solve a problem or
add a benefit. If you find a niche and decide that Pakistan is of
interest to you, it’s crucial to identify the right entry point into
the market. Work out who your ideal client is and back it up
with a great value proposition.’
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©Commonwealth of Australia 2016