The operator of fast food outlet KFC and the Sizzler restaurant chain, Collins Foods, says its fledgling gourmet sausage and “haute dogs” outlets are showing potential.

“Our small investment in early stage concept Snag Stand provides a further long term growth prospect for the company, with the concept already delivering encouraging results,” chairman, Russell Tate, told shareholders at the company’s annual general meeting on Wednesday.

Collins Foods is taking on the likes of Grill’d Burgers, Guzman Y Gomez, and Mad Mex in the “fast casual” segment of the quick service and casual dining industry.

The fast casual segment is the industry’s fastest growing segment.

Collins Foods said the Snag Stands concept was still in its infancy and needed to evolve.

Six Snag Stands have been opened, but some of the locations have not been ideal and will be moved.

Elsewhere, the group’s new Sizzler restaurants in China have been performing well.

Collins Foods opened four Sizzler restaurants in China and Thailand during the 2013/14 financial year.

The group also plans to rollout a program to give Sizzler restaurants a new look, called “get refreshed”, in the next six to eight months.

Changes made under the program to a Sizzler in the Queensland town of Cleveland had generated more sales than expected.

Meanwhile, same store sales at the group’s KFC outlets have risen three per cent in the first quarter of the new financial year.

Shares in Collins Foods were two cents higher at $2.35 at 1403 AEST.

AAP