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Burger Wars are now Border Wars

Chains expanding in China, India, Russia, Brazil and beyond.

July 7, 2011 by Alicia Kelso — Editor, QSRWeb.com

Subway's debut overseas was in Bahrain in 1984. When the chain's original franchise director Dick Pilchen first saw the chain's logo displayed in a foreign land, he described the experience as "very emotional."

Now Subway plans on opening more than 600 stores in China by 2015. If the chain – which recently became the largest in the world – hits this goal, it will almost triple its unit count in four years and will intensify an already-heated American QSR competition in that country.

Yum! Brands has long been king in China, and KFC is now up to more than 3,200 units throughout the mainland.

McDonald's recently announced its plan to give Yum! a run for its money, with the addition of 700 new stores by 2013, which would put its total at more than 2,000 stores there.

Not to be left completely in the dust, Wendy's is also jockeying for position in China, as is Dairy Queen.

Because of growing incomes and rapid urbanization, the QSR segment is growing by almost 20 percent annually in China. The trend has been interesting to watch for many reasons – Pizza Hut is a white linen, fine dining establishment, for example, and McDonald's didn't open its first drive-thru unit there until 2005.

But China is only a tip of the global market iceberg for ambitious American chains.

India's QSR market growth has been staggering for almost two years now - growing at an estimated 30 to 35 percent per annum.

The Middle East's economic viability has inspired expansion plans and innovations from the gamut of brands, big and small.

And who would have predicted a Wendy's presence on Old Arbat street in Moscow? A few years ago, people were writing the chain off as a 50-year-old has-been with a confusing business strategy. But the chain has since dropped its sister brand Arby's and now plans to focus on remodeling, menu improvements and global expansion. The Wendy's Company, as it is now called, anticipates opening nearly 200 restaurants in Russia within the next 10 years. It also plans to make a footprint in Argentina and Brazil.

Speaking of Brazil, Burger King seems to be mounting a comeback of its own since the sale to 3G Capital in the fall of 2010. In doing so, it is also planning on an increased global footprint. Since Burger King's new bosses are Brazilian and they know that market intimately, this could explain the chains' ambitious plans in that country.

Taco Bell's borders may also be expanding. Just last month, a New Zealand newspaper reported that Restaurant Brands is launching a pilot Taco Bell in Auckland.

This comes shortly after its sister chain KFC had a record-setting launch of the infamous Double Down in that country.

As chains continue to rebound from the recession and invest in growth, emerging markets overseas are especially attractive. The competitive space isn't crowded (yet) and consumer curiosity is thriving. On foreign soil, these chains are shiny and new, and they're capitalizing on a strong honeymoon phase.

Forget the burger wars of the '80s. The American QSR segment has moved onto the border wars.

About Alicia Kelso

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