Article

Restaurant concepts expand on foreign shores

With their sites set on international ground, restaurant chains prove it’s a small world, after all.

May 5, 2011 by Valerie Killifer — Editor, FastCasual.com

For two years restaurant chains scaled back their expansion efforts in the United States, opting to wait out the recession before embarking on global franchise efforts. Toward the end of 2010 and in the first quarter of 2011, announcements have been made almost weekly communicating the latest round of franchise agreements destined to expand the dining footprint in countries across the globe.

While some chains are choosing to grow in the United States, a larger movement is taking place that will take the likes of Jamba Juice, Buffalo Wild Wings, Charley’s Grilled Subs and Moe’s Southwest Grill to locales in Canada, Europe and the United Arab Emirates.

So, why now?

“For us, it was one of the strategies that we had discussed over the past two years, but we had to go through a process to select the countries to develop Buffalo Wild Wings,” said Mo Sawda, managing director, International, with Buffalo Wild Wings.

For BWW, Canada offered the best chance of success for their first international location, even though it tied with Australia as the leading international growth market during the chain’s assessment of foreign markets. While its proximity to the United States was one standout positive, the chain’s ability to build upon brand awareness and tap into Canada’s sports advocacy proved persuasive.

“A good percentage of Canadians have seen Buffalo Wild Wings and we think that Canadians will have a great love for it because of beer, sports and wings. We believe that Canada would open a tremendous opportunity of growth for us,” Sawda said. “Yes, it is close to the U.S., but we need to be careful and respectful of the Canadian culture so we need to adjust our model to meet the local business needs.”

For example, hockey could be the chain’s focus in Canada rather than football, as it is in the United States.

So far, the chain is anticipating the opening of 50 units in Canada over the next five years based on a mixed corporate and franchise-owned store model.

Expansion in the United Kingdom also is being reviewed while Buffalo Wild Wings focuses on Canada.

“When we visited the United Kingdom, we thought that if we grew in the U.K., it would give us the opportunity to launch in the EU and Eastern Europe. Right now we have meetings with the Australian business industry, and it could be the third country we launch after the U.K., or it could be simultaneous,” Sawda said. “We have a dedicated team and a clear objective on the five year plan, and the team is very focused on those objectives.”

Jamba Juice

It seems the U.S. concepts that are interested in developing are as diverse as the chains themselves.

While Jamba Juice also is targeting Canada for growth, the company is launching an expansion program in Asia, South America and the Middle East. The first deal took the brand into South Korea in 2010, and a second will see units opening in Canada.

“We identified about 12 countries that we are proactively pursuing and basically, there are a lot of small opportunities out there, but I’m not interested in launching in markets where the size is 12 stores,” said Thibault de Chattelus, Jamba Juice’s senior VP of global franchise development. “We need an area with strong location expansion and a partner that will deliver. We have to see the 50 stores being developed successfully.”

In order to successfully launch an international expansion package, the company has incorporated lessons learned by watching quick-service restaurant expansions across the globe.

“We will be more relevant locally when it comes to specific menu items and provide more local offerings. Being a California-based business, there is significant brand awareness of Jamba Juice in several Asian markets as people have traveled to the West Coast. So, we’re starting with fairly healthy brand awareness,” de Chattelus said.

The chain’s South Korean partner, SPC Group also operates 3,500 retail outlets including bakery and coffee shops, and they are a prime operator for Dunkin' Brands. SPC is slated to bring 200 units to South Korea over the next 10 years.

“The smoothie product is very universal, but we’ve done very minor tweaks in some of the secondary lines of our product portfolio to adjust to the sensitivity of the Korean palate,” said Jamba president James White. “Ancillary, complimentary food is what will be localized. Those products will not exactly be the same, but along the same lines."

“We’d like to make expansion a bigger priority for the company from a growth acceleration standpoint. And we’re equally excited about the partner we’re going to Canada with. We don’t want to worry about what our partners are doing over there when they have our brand in their hand,” White said.