Johnny Rockets announced plans last week to open 100 restaurants in China over the next decade in its largest development agreement to date, a massive expansion plan that will help it open its first Chinese franchise in 2016 and double its overseas locations by 2017. In the deal, the popular American burger chain will form a joint venture with Malaysian-based partners AUM Hospitality, a food and drink developer; and Parkson Retail Group, a department store operator gaining a foothold in restaurant franchise development in China.
AUM Hospitality already is a franchise partner and operator for Johnny Rockets restaurants in more than 125 locations in the Philippines, Malaysia, Indonesia, and South Korea, and will continue in this role in the China deal.
The restaurants will begin opening in Parkson-owned properties in Shanghai and Beijing, before developing other stand-alone locations in the cities.
Senior vice-president of international development Scott Chorna believes that Johnny Rocket’s iconic, American style—combined with its partners’ experience with local tastes and operations—can help it find success in China.
With the American burger market thoroughly saturated, many companies like Johnny Rockets have been looking abroad. In China, where there is strong middle-class demand for American brands, there is plenty of opportunity for growth. Last year in fast food alone, China generated $108 billion in revenue, according to China Daily. That’s a 9.7 percent rise from 2013, and 19 percent of 2014’s total global fast food revenue.
However, fast food chains like McDonalds have struggled in China in the wake of recent food safety gaffes. Johnny Rockets won’t be exempt from the effects of such scrutiny, but its image as a full-service restaurant will certainly help gain consumer trust, says Darren Tristano, executive vice-president at Technomic, a foodservice research firm. “[It’ll] be more cautious of the supply chain and certainly more careful on food-handling procedures because the sensitivity levels are very high today,” he said.
(Photo by Nick Ares via Flickr)