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

So far, the signs are not good.

“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.”

http://www.globalpost.com/dispatch/indonesia/091110/can-the-hamburger-king-indonesia-topple-mcdonalds