QSRs Consider Overseas Expansion

More fast-food chains are looking to other countries for growth opportunities.

May 03, 2010

ATLANTA - Wendy??s/Arby??s Group has plans to add up to 45 new stores overseas in 2010. Wing Zone will soon be in Japan. Moe??s Southwest Grill and Popeyes are considering Middle East locations.

With the U.S. still recovering from a recession, quick-service restaurant chains are looking outward for growth opportunities, the Atlanta Journal-Constitution reports.

"There are a lot of markets that these companies want to tap," said Sara Senator, an analysts with Sanford C. Bernstein.

Yum! Brands took its KFC chain to China in 1987, becoming the first QSR in that country. McDonald??s opened restaurants in China three years later. Today, China accounts for around a third of Yum??s sales and operating profit, while McDonald??s receives approximately 60 percent of sales from stores in countries other than the United States.

"In this economic environment, it is tough sledding," said Cheryl Bachelder, CEO of Popeyes. "These are anxious times to be a franchisee."

Many chains have slowed new restaurant openings in the United States because of the recession and tighter credit. International markets represent an opportunity to expand a company??s risk and increase its profits.

"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."

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