Can Indonesia's "Hamburger King" topple McDonald's?

JAKARTA, Indonesia — Would you buy a burger from a one-eyed pirate named Toni Jack? That's the hope of one Indonesian entrepreneur, whose roguish answer to Ronald McDonald also claims his burgers are “better than that one.”

The slogan is Bambang Rachmadi’s attempt to differentiate his new brand from the world’s largest hamburger chain – a company he held majority rights to until McDonald’s sold his stake in March.

Bambang, the self-described hamburger king of Indonesia, claims he was not notified of the sale of his $135 million in assets, which a company spokeswoman described as “personal." He is pursuing legal action against the corporate behemoth.

In the meantime, Bambang has transformed his 13 owner-operated McDonald’s into Toni Jack’s, a step he said was necessary to save the jobs of about 800 employees.

So last month, a McDonald's in central Jakarta disappeared under a black tarp with the Tony Jack’s logo: a pirate whose hat bears a burger crossed by a fork and spoon.

The haste of the changeover is evident by the covering and the shadow of an M on the outside of the building. The restaurant’s new colors – orange, green and black – are in stark contrast to McDonald’s more cheerful red and yellow.

For years Bambang sought to separate his McDonald’s chains from their American association. When anti-U.S. protests broke out over the war in Afghanistan in 2001, the franchise owner instructed restaurant managers to display pictures of him and his wife in full Muslim dress to appeal to religious groups that claimed fast-food chains were a corrupting influence on Indonesia, the world’s most-populous Muslim nation.

McDonald’s first began its Indonesia operations in 1991 with a menu focused on hamburger and french fries. But it also included fried chicken and rice to appeal to local preferences. Rather than special sauce or mayonnaise, meals came with packets of spicy sauce called sambal. The menu also labeled the food as halal, cooked according to Islamic dietary laws.

Toni Jack’s has continued that approach with a menu that — despite the lack of halal labeling — is nearly identical to McDonald’s. But according to company spokeswoman Tetty Hutapea, the taste is "different."

Hamburgers come with egg, black pepper seasoning or BBQ sauce, and most of the value items are devoted to the Chicken Jack, a piece of fried chicken served with a choice of scrambled egg or rice and a soda. The prices are slightly lower than at McDonald’s, with the cheapest item, a Chicken Jack No. 1, selling for Rp15,000 ($1.50).

Visitors to the chain seem uncertain about the switch. On a recent visit, most lunch customers on a recent visit said it was their first taste of Toni Jack’s. Some said they noticed little change from McDonald's usual fare. Others complained of a drop in quality and selection.

“The meat is not good, and there are fewer choices for burgers,” said Aouini Nabil, a security guard from Paris, while poking at the remains of the chicken burger on his tray. His fiance Rento Utami said Toni Jack’s seemed to draw fewer customers, particularly teenagers and tourists.

A Spanish Embassy worker who entered the restaurant thinking it was still McDonald’s said he was surprised by the change but decided to give Toni Jack’s a try because he was short on time. Although he finished his burger, he said the taste was "not great."

After the lunchtime rush many half-eaten burgers remained in their plain white Styrofoam containers. The fried chicken meals were more popular. A group of female office workers was ambivalent about whether or not they would return, but a handful of students from nearby Atmajaya University said no, they wouldn’t be back.

“The meals are smaller and more expensive than at McDonald’s,” said Paola Tobing, who ended up ordering fried chicken because Toni Jack’s doesn’t offer the fish sandwich she usually orders from McDonald’s.

Others were more positive about the switch. Fransesko Laban, an employee with an international NGO, stayed to do some work after finishing his Chicken Jack meal. He said he prefers Toni Jack’s to McDonald’s because it is clean and smoke free.

McDonald’s ranks first among fast-food chains in the United States, with 2008 revenue growing 3.2 percent to $23.5 billion. The company also posted huge growth in Asia, led mainly by China, but it still lags Burger King and KFC.

The loss of 13 restaurants may not make much of a dent in the global presence of McDonald’s, which operates 31,000 around the world. But it doesn’t do much for the company’s image in a region where it has faced more than one legal tussle recently. In late October, McDonald’s lost a trademark infringement suit in Malaysia when the country's highest court decided to allow a local Indian restaurant named McCurry to continue using the Mc prefix.

The 97 McDonald’s restaurants that remain in Indonesia now belong to sole franchisee PT Sinar Sosro, producers of the country’s leading bottled tea brand. Sinar Sosro says it aims to open as many as 75 new restaurants over the next five years, which helps sweeten the new partnership. According to Indonesia’s Investment Coordinating Board, McDonald’s collected $846 million between 1991 and 2007 from a 5 percent royalty fee attached to all its Indonesian franchises.

Bambang also plans to open several new branches in the year ahead, with a goal to franchise the restaurant  to other countries in 2014.

For now, spokeswoman Tetty Hutapea said it’s too early to gauge Toni Jack’s sales performance but said that business is “stable.”