Several leading U.S.-based fast-casual chain restaurants ramped up their Canadian expansion efforts in 2012. Five Guys Burgers and Fries was particularly aggressive, nearly doubling its units (from 28 to 54) in one year. Five other U.S. chains committed to Canadian expansion—Taco Del Mar, Fatburger, Panera Bread, Chipotle Mexican Grill and Smashburger—grew location totals between 9 and 200 percent over 2011.
Expansion efforts are expected to continue as brands aim to secure the best real estate in their targeted growth markets. Recent announcements include:
– Fatburger, with 32 operational stores currently in Canada, plans to open an additional 10 units over the next year.
– Smashburger plans to open up to 50 Canadian units in the next three years.
– Five Guys Burgers and Fries, which experienced rapid U.S. growth, appears to have similar plans for Canada. Further solidifying its aggressive expansion intentions, Five Guys’ website states that all of its territories have been sold to franchisees for development in both Canada and U.S. markets.
Panera Bread and Chipotle Mexican Grill have previously suggested that they’re planning gradual growth in order to fine-tune operations and customer awareness in new markets, although recent trends indicate a growth spurt.
U.S. chains are not without competition, however. Several Canadian fast-casual brands are already well established in Canada, including Extreme Pita (278 locations), Sushi Shop (115), Teriyaki Experience (107), Edo Japan (104) and Mucho Burrito Fresh Mexican Grill (67). While no official plans have been announced, each of these chains has steadily increased units over the last few years.
Overall, the fast-casual segment in Canada is still rather small when compared to the U.S. market. Fast-casual restaurants represented only 5.5 percent of limited-service locations within the Top 200 Canadian chains, leaving plenty of room for growth. This bodes well for restaurant chains that are looking to expand in this market, especially for those that offer less prevalent types of cuisine, such as pizza, sandwich, bakery café and other ethnic foods.
Note: The information in this post originated from the 2013 Technomic Top 200 Canadian Chain Restaurant Report and Technomic’s Digital Resource Library.