News
First Wendy's/Arby's international co-branded store kicks off global growth strategy
May 10, 2010
Wendy's/Arby's International Inc. has accomplished a significant first step in implementing its new international growth plan with the opening of Wendy's/Arby's Group Inc.'s first dual-branded store outside of the United States. New franchisee Al Jammaz Group has opened the first international dual-branded Wendy's and Arby's restaurant in Dubai, United Arab Emirates.
The dual-branded Wendy's and Arby's restaurant is located in the Festival City Mall, in the Festival City area of Dubai. The restaurant features a single counter and menuboard, a dedicated seating area, and bistro-style seating around the perimeter of the restaurant space.
Al Jammaz Group's first free-standing, dual-branded Wendy's and Arby's restaurant is scheduled to open this summer and will be located in the Emirate of Ajman. The restaurant will feature a pick-up window to serve drive-thru customers. The franchisee plans over the next 10 years to open 80 dual-branded restaurants in portions of the Middle East and North Africa, with an initial focus on development in the United Arab Emirates.
Roland Smith, president and CEO of Wendy's/Arby's Group, said Al Jammaz Group's decision to make all its new stores dual-branded is an affirmation of the company's growth plan.
"Reaching this milestone opens the door for more rapid international expansion," he said. "We believe offering customers both of our quality brands under one roof in the international arena will generate higher sales volumes and better return on investment."
International growth strategy
WAG's comprehensive research has indicated the potential for more than 8,000 restaurants for its brands outside of North America. The company is now in the investment phase as it explores opportunities in its existing markets as well as targets new ones for immediate entry. Dual-branded stores are an important part of that strategy, with many franchisees excited about expanding their footprint in their respective countries by showcasing both menus in one building.
Smith said the dual-branding opportunity developed as the merger between the two brands came to fruition 18 months ago. The two menus are complementary and together offer a broad range of high-quality products. By opening in one building instead of two, franchisees will save on costs while increasing their sales volume by offering both brands.
"We are confident that restaurants with combined Wendy's and Arby's menus will help us fully capitalize on this significant long-term growth opportunity by providing a compelling business model for prospective franchisees around the world," he said.
WAG plans to use the learning from this initial phase of its international growth strategy to determine how to "move forward to take advantage of this in a reasonably timely manner," Smith said. The company is initially focused on opportunities in Asia and South America but declined to name specific countries. Growth in Europe likely will develop more slowly due to the highly competitive market and the high cost of real estate there.
Domestic growth
Even as the company focuses on international growth, Smith said both brands have significant growth opportunities in the United States. Many of their competitors are near the saturation point while Wendy's, with about 6,000 stores, and Arby's, with around 3,500, have many more options for adding new locations.
"That gives us a sizable expansion opportunity in the U.S. we think we will also take advantage of as we reenergize both of these brands, which we are in the process right now," he said.
Although the company did open its dual-branded training center in the United States in December, Smith said, future of co-branding in this country uncertain. With both brands more heavily developed in North American, opening such locations may not be as attractive to franchisees in this country.
"What I'm sure of is we have a lot of opportunity in our single-branded stores as we expand in the U.S.," he said.
Related Media
Subscribe
Get the latest news and resources from QSR Web.
