Quiznos Steps Up International Efforts [2010-08-09]
Quiznos already has master franchisees in nearly 25 countries and territories, but the chain announced that it is revamping international growth efforts and is aiming to be in nearly 40 countries and territories two years from now.
Lee Vala, international chief development officer for Quiznos, says the company is targeting Central and South America, Europe, the Middle East, and Southeast Asia as potential markets to expand into.
"We have the economic and operational resources to successfully launch and expand internationally," Vala says.
"Now it's a matter of being able to find those right partners. Clearly the markets are important, but what's more important is the … master franchisee that you're going to pair yourself with."
Vala says Quiznos is interested in master franchisees that already have a business infrastructure in their market and can easily pay for start-up costs and convert their resources for Quiznos.
Selecting the right master franchisee and preparing them to grow the brand is not something Quiznos is taking lightly, Vala says. He says he is personally visiting prospects in their country before signing a formal agreement.
"We are not interested in people who are looking to collect brands," he says. "We are interested in people who are going to be able to grow and expand the concept in their country."
International master franchisees at Quiznos are also getting something that Vala says other brands do not offer: executive training. All new international master franchisees come to the U.S. for an executive training program that teaches everything from supply chain to real estate, from marketing to design and construction.
By putting franchisees through this process, which includes access to top Quiznos executives, Vala says they will be able to adapt their brands appropriately to their country.
"Adaptation is going to be a big part of our process," Vala says. "Quiznos is going to provide the system knowledge, and our well-qualified partners in different parts of the world are going to provide us with the local knowledge. As you can imagine, that can become a very powerful formula for success."
Vala cites the use of halal meat in the Middle East and vegetarian offerings in India as ways in which Quiznos will adapt to international markets.
Of course, no brand could expand so much overseas without a solidified hold on domestic business. Vala says Quiznos would not have committed to such growth if it wasn't sure it was stable at home in the U.S.
"The first thing [prospective franchisees] will look at is the health of our company and our growth rate and our growth plan, and how well we are doing domestically, in order for them to get assurance that we're going to be able to support them," he says.
Tags:quiznos, quiznos franchise, lee vala, master franchisee, franchise training, international master franchisees, international growth, international expansion,
Source: QSR Magazine, Sam Oches.
This Blog/News/Press Release/Information is posted by Sparkleminds, A End To End Franchise Solutions Company, Based at Bangalore, India.We offer customized services to businesses seeking expansion through the franchise route and over the last decade have helped numerous clients to scale up their businesses.We also work closely on international master franchise expansions.Visit us on www.sparkleminds.com and speak to us, and we are sure you will be more than glad to understand how we could grow your existing business multi-fold times.
Showing posts with label international expansion. Show all posts
Showing posts with label international expansion. Show all posts
Saturday, August 14, 2010
Friday, April 30, 2010
Fast Food Chains Heading Overseas For International Expansion.
Popeyes and Moe’s Southwest Grill are scouting locations in the Middle East. Wing Zone is taking its delivery service to Tokyo. Wendy’s/Arby’s Group plans to open as many as 45 new stores in foreign countries this year.
With the recession crimping U.S. sales in the usually resilient fast food business -- and lending for new franchises tight -- Atlanta-based chains and brands are looking overseas for growth.
“There are a lot of markets that these companies want to tap,” said Sanford C. Bernstein analyst Sara Senatore.
The trail has been well-blazed. In 1987, Yum! Brands, owner of KFC, became the first fast-food chain to enter China. McDonald’s followed in 1990. Today, their financial results bear the fruits of that diversification. China represents about one-third of Yum’s sales and operating profit; McDonald’s gets about 60 percent of sales outside the U.S.
The latest international push is partly an outgrowth of tough competition in the United States, compounded by a tough economy and tight credit.
“In this economic environment, it is tough sledding,” said Cheryl Bachelder, CEO of Popeyes. “These are anxious times to be a franchisee.”
New restaurant openings in the U.S. have slowed down dramatically, and analysts warn demand will remain lax for some time. The recession brought home the reality of the U.S. as a mature fast-food market.
“The U.S. is the most saturated (fast-food) market in the world,” said Roland Smith, CEO of Wendy’s/Arby’s. “It’s harder to expand here, depending on your brand.”
International expansion helps balance a company’s risk and protects its profits, he said.
Here’s how four Atlanta-based companies are going after international growth:
Wendy’s/Arby’s Group
Smith, a West Point graduate, has lived and worked in Germany, Canada and Islamabad, Pakistan. Moving up the ladder at Pepsi and KFC International, he looked to international experience to differentiate himself. Now, he hopes international growth will set his company apart.
Smith has set ambitious growth plans for the new international subsidiary of Wendy’s/Arby’s, which is currently dwarfed by the domestic side. The company wants to eventually have 8,000 restaurants in international markets.
The company won’t put a timetable on that goal, but Smith said international sales should be a “significant, meaningful piece” of the business within five years. “International is like compound interest,” he said. “It starts to pay back pretty nicely in a short amount of time.”
Smith insists that Wendy’s/Arby’s still has good opportunities to expand in the U.S. “But if you look at long-term growth potential,” he said, “not to focus significantly on the international opportunity would be a big miss.”
The company says a franchise partner in the Middle East is aggressively opening stores. Dubai’s first dual-branded Wendy’s/Arby’s restaurant will open in May. Wendy’s/Arby’s has a presence in Indonesia, the Philippines and New Zealand, as well as Puerto Rico, Venezuela, Honduras, Mexico and the Bahamas.
The company wants a franchise group to open 35 Wendy’s restaurants in the Middle East and Singapore over the next 10 years. It is interviewing potential franchise companies to re-open Japan. (The company ended its deal with a franchise partner in Japan four months ago, alleging non-performance of contract obligations.) Japan is important because its people are well-acquainted with Western fast food.
Meanwhile, Wendy’s/Arby’s is considering opening company-owned restaurants as well as franchise locations in China.
“Asia is certainly a big opportunity for us,” said Smith. “You’d have to have your head in a hole in the ground not to recognize the opportunity in China. A lot of our competitors are doing very well there.”
AFC Enterprises Inc.
The franchiser and operator of Popeyes restaurants opened 95 restaurants last year; 56 were outside the U.S.
Turkey is Popeyes’ fastest-growing country. It expanded to that nation in 2008 and now has 52 restaurants there. Since 2008, the chain has also pushed into Singapore, Malaysia and Egypt. Popeyes is chasing the growing global middle class, which typically lacks the restaurant variety of the U.S., said CEO Cheryl Bachelder.
“We like to go to countries that love flavor,” said Bachelder. “We actually look at the cayenne pepper index -- the propensity of a country to eat cayenne pepper.”
Popeyes is the world’s second largest quick-service chicken concept, behind KFC. At the end of 2009, it had 1,943 restaurants in the United States, Puerto Rico, Guam and 27 foreign countries. Bachelder said the brand, wrapped in American Cajun identity, doesn’t encounter much resistance in the Middle East, where it has a foothold in Dubai, Abu Dhabi, Kuwait, Saudi Arabia and Turkey.
“They are very receptive,” she said. “We are a flavorful brand, but we are not a red, white and blue brand. We don’t get the flack that other (American) brands do, because we are seen as a multicultural brand.”
But Popeyes isn’t ignoring its roots back in America, said Bachelder.
“Many chains are actually built out in the U.S.,” she said. “We are not. We have some more runway both in the U.S. and internationally.”
Wing Zone
Matt Friedman, co-founder of Atlanta-based Wing Zone, hopes to bring one mouth-burning piece of Americana -- the hot chicken wing -- to Japan.
“People think we’re nuts,” said Friedman, CEO of the 100-unit chain. “There really hasn’t been a regional or international buffalo wings franchise to expand internationally.”
Friedman said Wing Zone, which has catered to college students since being established at the University of Florida in 1991, has avoided far-flung expansion. It is in Panama and Mexico, but until recently the goal was to stay close to the U.S. The company reconsidered when domestic growth slowed last year and San Francisco‚ìbased Pacific Rim Partners asked about bringing Wing Zone to Tokyo.
“The density of people there is truly like nothing else in the world,” said Friedman. The company plans 50 locations in Tokyo.
“International is probably a longer-term play,” said Friedman. “We’re gonna work out some kinks.”
Moe’s Southwest Grill
What goes well with a burrito? If you’re Paul Damico, president of Moe’s, you hope the answer is a cinnamon bun. Executives at Moe’s, which like Cinnabon is owned by Atlanta-based private equity firm Roark Capital Group, are looking at countries that already have Cinnabon franchises.
The goal: to see if those current franchisees would be interested in adding Moe’s stores. Potential markets include the United Arab Emirates, Saudi Arabia, Qatar, Lebanon, India, Singapore, and Malaysia.
Cinnabon has recently launched into India, Romania, Russia, Greece, Cyprus, England and Austria. It now is in 35 countries.
“They have the supply chain, they have the finance lined up,” Damico said of Cinnabon. The next step: getting existing Cinnabon franchisees comfortable with the Moe’s brand.
International expansion “takes a lot of time and a lot of work,” said Damico. “Is the supply chain available? What our R&D group is really focused on right now is, what can we do to customize (the menu) so the local community will embrace it? Beef is not going to be on the menu in India. Pork is not going to be on the menu in Istanbul.” (A franchisee is building a Moe’s store in the food court atop Istanbul’s tallest building.)
Moe’s also plans to open 50 U.S. restaurants this year and perhaps 100 in 2011. “The U.S. is still our core market,” said Damico.
How we got the story
Amid slow times in the U.S. restaurant industry, a number of local fast-food franchise chains have plans for expansion in international markets. Reporter Jeremiah McWilliams started tracking the trend, doing interviews and listening to conference calls with executives, equity analysts and consultants, and also reviewing company documents and transcripts of earnings conference calls.
Source: Atlanta Business News 3:37 p.m. Thursday, April 29, 2010
Tags:Fast Food Chains, Popeyes, Moe's Southwest grill, wing zone, wendy's, arby's,yum brands, mcdonalds,international expansion,franchise partner,franchise group,cinnabon,fast-food franchise,consultants,
With the recession crimping U.S. sales in the usually resilient fast food business -- and lending for new franchises tight -- Atlanta-based chains and brands are looking overseas for growth.
“There are a lot of markets that these companies want to tap,” said Sanford C. Bernstein analyst Sara Senatore.
The trail has been well-blazed. In 1987, Yum! Brands, owner of KFC, became the first fast-food chain to enter China. McDonald’s followed in 1990. Today, their financial results bear the fruits of that diversification. China represents about one-third of Yum’s sales and operating profit; McDonald’s gets about 60 percent of sales outside the U.S.
The latest international push is partly an outgrowth of tough competition in the United States, compounded by a tough economy and tight credit.
“In this economic environment, it is tough sledding,” said Cheryl Bachelder, CEO of Popeyes. “These are anxious times to be a franchisee.”
New restaurant openings in the U.S. have slowed down dramatically, and analysts warn demand will remain lax for some time. The recession brought home the reality of the U.S. as a mature fast-food market.
“The U.S. is the most saturated (fast-food) market in the world,” said Roland Smith, CEO of Wendy’s/Arby’s. “It’s harder to expand here, depending on your brand.”
International expansion helps balance a company’s risk and protects its profits, he said.
Here’s how four Atlanta-based companies are going after international growth:
Wendy’s/Arby’s Group
Smith, a West Point graduate, has lived and worked in Germany, Canada and Islamabad, Pakistan. Moving up the ladder at Pepsi and KFC International, he looked to international experience to differentiate himself. Now, he hopes international growth will set his company apart.
Smith has set ambitious growth plans for the new international subsidiary of Wendy’s/Arby’s, which is currently dwarfed by the domestic side. The company wants to eventually have 8,000 restaurants in international markets.
The company won’t put a timetable on that goal, but Smith said international sales should be a “significant, meaningful piece” of the business within five years. “International is like compound interest,” he said. “It starts to pay back pretty nicely in a short amount of time.”
Smith insists that Wendy’s/Arby’s still has good opportunities to expand in the U.S. “But if you look at long-term growth potential,” he said, “not to focus significantly on the international opportunity would be a big miss.”
The company says a franchise partner in the Middle East is aggressively opening stores. Dubai’s first dual-branded Wendy’s/Arby’s restaurant will open in May. Wendy’s/Arby’s has a presence in Indonesia, the Philippines and New Zealand, as well as Puerto Rico, Venezuela, Honduras, Mexico and the Bahamas.
The company wants a franchise group to open 35 Wendy’s restaurants in the Middle East and Singapore over the next 10 years. It is interviewing potential franchise companies to re-open Japan. (The company ended its deal with a franchise partner in Japan four months ago, alleging non-performance of contract obligations.) Japan is important because its people are well-acquainted with Western fast food.
Meanwhile, Wendy’s/Arby’s is considering opening company-owned restaurants as well as franchise locations in China.
“Asia is certainly a big opportunity for us,” said Smith. “You’d have to have your head in a hole in the ground not to recognize the opportunity in China. A lot of our competitors are doing very well there.”
AFC Enterprises Inc.
The franchiser and operator of Popeyes restaurants opened 95 restaurants last year; 56 were outside the U.S.
Turkey is Popeyes’ fastest-growing country. It expanded to that nation in 2008 and now has 52 restaurants there. Since 2008, the chain has also pushed into Singapore, Malaysia and Egypt. Popeyes is chasing the growing global middle class, which typically lacks the restaurant variety of the U.S., said CEO Cheryl Bachelder.
“We like to go to countries that love flavor,” said Bachelder. “We actually look at the cayenne pepper index -- the propensity of a country to eat cayenne pepper.”
Popeyes is the world’s second largest quick-service chicken concept, behind KFC. At the end of 2009, it had 1,943 restaurants in the United States, Puerto Rico, Guam and 27 foreign countries. Bachelder said the brand, wrapped in American Cajun identity, doesn’t encounter much resistance in the Middle East, where it has a foothold in Dubai, Abu Dhabi, Kuwait, Saudi Arabia and Turkey.
“They are very receptive,” she said. “We are a flavorful brand, but we are not a red, white and blue brand. We don’t get the flack that other (American) brands do, because we are seen as a multicultural brand.”
But Popeyes isn’t ignoring its roots back in America, said Bachelder.
“Many chains are actually built out in the U.S.,” she said. “We are not. We have some more runway both in the U.S. and internationally.”
Wing Zone
Matt Friedman, co-founder of Atlanta-based Wing Zone, hopes to bring one mouth-burning piece of Americana -- the hot chicken wing -- to Japan.
“People think we’re nuts,” said Friedman, CEO of the 100-unit chain. “There really hasn’t been a regional or international buffalo wings franchise to expand internationally.”
Friedman said Wing Zone, which has catered to college students since being established at the University of Florida in 1991, has avoided far-flung expansion. It is in Panama and Mexico, but until recently the goal was to stay close to the U.S. The company reconsidered when domestic growth slowed last year and San Francisco‚ìbased Pacific Rim Partners asked about bringing Wing Zone to Tokyo.
“The density of people there is truly like nothing else in the world,” said Friedman. The company plans 50 locations in Tokyo.
“International is probably a longer-term play,” said Friedman. “We’re gonna work out some kinks.”
Moe’s Southwest Grill
What goes well with a burrito? If you’re Paul Damico, president of Moe’s, you hope the answer is a cinnamon bun. Executives at Moe’s, which like Cinnabon is owned by Atlanta-based private equity firm Roark Capital Group, are looking at countries that already have Cinnabon franchises.
The goal: to see if those current franchisees would be interested in adding Moe’s stores. Potential markets include the United Arab Emirates, Saudi Arabia, Qatar, Lebanon, India, Singapore, and Malaysia.
Cinnabon has recently launched into India, Romania, Russia, Greece, Cyprus, England and Austria. It now is in 35 countries.
“They have the supply chain, they have the finance lined up,” Damico said of Cinnabon. The next step: getting existing Cinnabon franchisees comfortable with the Moe’s brand.
International expansion “takes a lot of time and a lot of work,” said Damico. “Is the supply chain available? What our R&D group is really focused on right now is, what can we do to customize (the menu) so the local community will embrace it? Beef is not going to be on the menu in India. Pork is not going to be on the menu in Istanbul.” (A franchisee is building a Moe’s store in the food court atop Istanbul’s tallest building.)
Moe’s also plans to open 50 U.S. restaurants this year and perhaps 100 in 2011. “The U.S. is still our core market,” said Damico.
How we got the story
Amid slow times in the U.S. restaurant industry, a number of local fast-food franchise chains have plans for expansion in international markets. Reporter Jeremiah McWilliams started tracking the trend, doing interviews and listening to conference calls with executives, equity analysts and consultants, and also reviewing company documents and transcripts of earnings conference calls.
Source: Atlanta Business News 3:37 p.m. Thursday, April 29, 2010
Tags:Fast Food Chains, Popeyes, Moe's Southwest grill, wing zone, wendy's, arby's,yum brands, mcdonalds,international expansion,franchise partner,franchise group,cinnabon,fast-food franchise,consultants,
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