Going Global: Canadian Chains Chart International Path to Growth

Restaurant industry analysts and investors are anticipating the release next week of Tim Hortons’ new strategic plan, which will detail how the company plans to shore up sales and boost performance both in Canada and in its challenged U.S. operations.

The chain’s struggles south of the border are well-documented and demonstrate the difficulties that even a nationally known and widely respected brand can encounter in expanding internationally. (In contrast to its U.S. difficulties, Tim Hortons last year reported better-than-expected performance in the Middle East.) A lack of name recognition in another country, underestimations of the competitiveness of a growing menu segment abroad, and cultural miscalculations about everything from menus to service style and hours can be major hurdles for expanding brands to jump.

Nevertheless, both emerging and established markets present enticing opportunities for brands eager to seize upon consumers’ increasingly global appetites or get in on the ground floor, so to speak, in up-and-coming restaurant segments (notably fast casual) in another country. And, in fact, several Canadian restaurant chains have announced plans recently to expand to or bolster their presence in international markets. Let’s look at a few of these chains making global moves—their position on Technomic’s Top 200 Canadian Chain Restaurants list for 2013 is noted:

Concept: Bento Sushi
Segment: Quick service
Headquarters: Markham, ON
Top 200 rank: 40
Signature offering: Hand-rolled sushi made with sustainably sourced seafood
Expansion news: Opened inside John F. Kennedy International Airport in New York, adding a nontraditional unit to the chain’s existing lineup of four street-front shops in the city

Concept: Earls Kitchen + Bar
Segment: Casual dining
Headquarters: North Vancouver, BC
Top 200 rank: 24
Signature offering:
Varied and extensive entrée selection and craft cocktails
Expansion news: Fifth U.S. location slated to open in Miami in spring (other U.S. units are in Denver and in Bellevue, WA); a unit in the Boston suburb of Somerville, MA, also is expected to open this year

Concept: New York Fries
Segment: Quick service
Headquarters: Toronto
Top 200 rank:
65
Signature offering: Cooked-to-order, skin-on french fries and poutine
Expansion news: First Saudi Arabian unit opened in January in Jeddah City’s Mall of Arabia; the chain’s fifth store in China opened later in the month in Ningbo. According to New York Fries’ website, the chain has stores in eight countries across the Middle East and Central/Eastern Asia.

Concept: Canadian 2 for 1 Pizza
Segment: Quick service
Headquarters: Fredericton, NB
Top 200 rank:
175
Signature offering: As implied, two pizzas for the price of one
Expansion news: Opened its first Middle Eastern unit recently in Dubai’s Jumeriah Lake Towers. Canadian 2 for 1 Pizza also has 30 locations in Singapore and nine in Malaysia; the chain is looking to expand in India, as well.

Concept: Relish Gourmet Burgers
Segment: Fast casual
Headquarters: Fredericton, NB
Top 200 rank:
N/A
Signature offering: Signature burgers made with 5-ounce 100% Angus beef patty and secret seasonings
Expansion news: Co-founder Rivers Corbett told the Financial Post in October that the chain is discussing a multiunit expansion in the Middle East and the U.K., with construction starting as early as this spring. The chain also is looking to open several dozen units across Canada, expanding rapidly from its current five-unit portfolio.

There are many, many factors for a rising restaurant brand to weigh in considering whether and where to expand internationally—not the least of which is management’s willingness to cede some operational control to far-flung partners. That’s why perhaps the most important key to success in foreign markets is having trusted, knowledgeable development teams in place. Business relationships built on mutual respect are essential in ensuring that the brand’s integrity is maintained abroad.

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Patrick Noone

With more than 15 years of experience in the research/consulting industry, Patrick Noone, Executive Vice President, Business Development, is integrally involved in the sales, development and marketing of Technomic's online resources, reports and custom studies—tools that provide clients with actionable industry data that supports their strategic and tactical business planning processes. He also manages Technomic's Business Development and Client Service teams.

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