Industry News | January 24, 2017 | QSR Exclusive Brief

Classic Chicken Chain Poised for 500-Unit Comeback

The first Rex’s Chicken 3.0 location will open in April 2017 in Bixby, Oklahoma. Rex’s Chicken

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Beautiful Brands International (BBI) signed a deal with the Muscogee Creek Nation’s Business Enterprise (MNBE) to open more than 500 Rex’s Chicken locations throughout 35 states. The MNBE will take the role of lead master franchisee for the emerging chain.

“There are plenty of chicken concepts,” says David Rutkauskas, founder and CEO of BBI, who operates the business with wife Camille. “No one is going to beat Chick-fil-A, but there is room for smaller chains, and we’re pretty excited.”

The Rutkauskases bought the rights to Rex’s Chicken in 2008 because they wanted to expand into the better-chicken market. The pair tried chicken products from a variety of distributors, but they had been disappointed with generic-tasting options.

Then David Rutkauskas remembered Rex’s Chicken, which was a popular chicken brand in his home state of Oklahoma in the 1970s, but had since disappeared. He contacted his lawyer to research what happened to the brand. Rutkauskas’s lawyer called him 30 minutes later and told the entrepreneur that Rex’s Chicken trademarks expired.

“He told me, ‘All you have to do is send a check for $1,500 to the state of Oklahoma and reestablish the marks,’” Rutkauskas says. “By that afternoon, I owned it.”

But this purchase only bought the rights to the name. The Rutkauskases still had to recreate all the recipes to get the chicken they remembered and loved.

“We just had to kind of piecemeal everything together from the internet, newspaper articles, and research,” David Rutkauskas says. “We spent probably 14 months, and we were able to reengineer every recipe to the exact formula Rex’s had in its heyday in the 70s.”

With the recipes in place, launching the restaurant was next on the agenda. The MNBE made a franchise agreement for the eight tribal jurisdictions, and Rex’s Chicken 2.0, as Rutkauskas calls it, opened in Tulsa in 2009.

The restaurant, however, did not work in that space. Rex’s 2.0 was shuttered, but Rutkauskas was not done with the idea. He decided to try one more incarnation of the brand.

“The MNBE were still technically franchisees of Rex’s Chicken and still loved it,” Rutkauskas says. “Once I decided to stop 2.0, I pitched them the idea for 3.0 with them taking on a greater role as a master franchisee instead of as a normal franchise. … And 18 months after I pitched them the idea, we signed on the dotted line.”

The first Rex’s Chicken 3.0 location will open in April 2017 in Bixby, Oklahoma, but that is just the first step. With the MNBE’s leadership, dozens of franchise operators and 40 groups are waiting to sign up to expand the brand throughout the 35 states in the deal and throughout the Middle East and Latin America.

“The cool thing is that now I get to focus on what [Camille and I] do best, which is brand building, menu development, food costs, pantry lists, and design,” Rutkauskas says. “We get to use the Muscogee Nation’s business enterprise skillset of hiring the right people, management, and support, so it’s a really fair deal for both parties. We couldn’t be happier that we have them as a partner.”

By Peggy Carouthers

Comments

Congratulations David and Camille! #MiddleCoast!
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Will Rex's Chicken be coming to the Pacific Northwest Washington and Oregon.

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Holy cow. Do not, under any circumstances, do business with David Rutkauskas.

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