Expansion: Anticipate mistakes, overcome setbacks
How to be successful abroad? During a panel discussion at the 24th European Foodservice Summit in Zurich, BigChefs founder Gamze Cizreli, Marugame Undon CEO Keith Bird and Head of Franchise Judd Williams and Dr. Stefan Tewes, shared insights into their expansion experiences in Europe and abroad.
Following an inspiring analysis on the topic of “International Expansion” by WhiteSpace partner Rebecca Viani, panel moderator Mario C. Bauer picked up the thread in the following conversation with three entrepreneurs, each of which brought a slightly different perspective to the discussion: the highly successful Japanese brand Marugame Udon, exploring European potentials by way of market entry in UK, the Turkish fast casual chain BigChefs with a presence in seven countries and now taking a foothold in Europe, and the leading German coffee shop brand that is now opening first stores in Texas, USA.
“You have to expect to make big mistakes on the way to international expansion” – Bauer cited the key learning of an expansion panel on the same stage in Zurich more than a decade ago. Here is what this year’s participants shared:
From Turkey to Europe
16 years after its launch in the Turkish capital Ankara, the fast-casual brand BigChefs is now present in seven countries. The geographical reach may come as a surprise: Besides Germany and Turkey, the lifestyle brand can also be found in Kazakhstan, Azerbaijan, Libya, Cyprus, Iraq and Belgium. Cizreli’s decision against geographical expansion targets “that have a rich food culture – like Italy, for example” caused laughter. Less humorous, however, was her review of the brand’s experience in Dubai: “It was a clear mistake”, Cizreli said, “to put BigChefs into the hands of a company that was both a franchiser and a property developer.” The restaurant in Dubai has since closed – but a return is not ruled out.
“The right partner is the key to success,” Cizreli stressed. In Germany, her brand recently celebrated the opening of its third location. Number four is to start next spring in the Westfield Hamburg-Überseequartier. However, an adjustment had to be made for the German locations due to staff shortages compared to the home country Turkey: The still extensive menu has been reduced in size.
In addition to Europe, BigChefs also plan to grow in the CIS countries. Rising out-of-home spending on food made these countries attractive destinations for restaurant companies, Cizreli said. “The UK, especially London, has been a dream from the beginning of our international expansion – and still is. However, property prices make the market a big challenge.”
Founder Gamze Cizreli’s Turkish restaurant concept BigChefs is opening its third German unit in Stuttgart. The new restaurant offers seating for up to 90 guests, and outside on the terrace there is room for another 160 guests. Levantine, Turkish and international delicacies are served.
From Japan to the UK
Marugame Udon has already made the leap to the UK. Keith Bird, CEO of the Japanese noodle brand in the UK, emphasised the importance of adaptations for new markets. “In Japan, Marugame has an unbeatably high brand awareness (90 per cent),” Bird reported about his brand, which currently counts over 850 restaurants in its home market Japan. In London, the chain launched its first European store in July 2021. “To be successful in the UK – and not just as a canteen for Japanese diners – the concept was adapted beforehand,” Bird said. For the British locations, the atmosphere was designed for a stronger evening business, while in Japan, the lunch business is significant. Accordingly, alcoholic drinks were added to the menu, but also vegan offerings. “With success,” Bird concludes after two years.
The prerequisite for this was not least the extensive work in the run-up to the launch: Problems and mistakes were anticipated in the pre-mortem. “Above all, the positioning of the brand for the new market has to fit,” said Bird. Based on demographic data, Germany, Spain and France are considered as the next expansion targets. According to Bird “the crucial question is: Do we find a partner who brings the right spirit? Does he understand real estate and the business?” If Marugame finds an according partner elsewhere first, “then we would probably also start in a market that we don’t have at the top of our list.”
Going West
The German brand Coffee Fellows has now been in business for 24 years. With 275 units, 250 of them in the home market. This makes the Munich brand the top dog in the coffee shop segment in Germany. Asked by moderator Mario C. Bauer about avoidable mistakes in foreign expansion, founder and CEO Dr. Stefan Tewes replied: “We were often too opportunistic.”
After moving into Austria, Switzerland, the Netherlands, Belgium, Bulgaria, Luxembourg, Malta, Mongolia, Spain and the Czech Republic in recent years, Tewes is currently looking with great expectations to the USA, where Coffee Fellows opened its first store with a local partner a few months ago. Why expand? “To operate in markets that promise more potential than our own.” In the first few months after the start of operations in Houston, Texas, Coffee Fellows was already able to see that it was facing completely different framework conditions: hardly any US guests come to Coffee Fellows without a car, the guest room should be even more generous in the future, and even with to-go orders a 10% tip is customary. The first store with a drive-thru is to open soon.
Home market insights
At the end of the round, moderator Bauer asked the three experts what tips they could give for their own home markets. The founder of Coffee Fellows had two suggestions for Germany: “You have to keep the staff shortage factor in mind when you are thinking about expanding to Germany. And secondly: “Never go to the city centre of a B-city. Unless you are a low-price concept!”
About Turkey, Gamze Cizreli said, “Turkey is a big market for local sourcing. Many brands that tried to land in Turkey with frozen goods have failed. On the other hand, Asian brands and coffee are on the winning side . Real estate is the easiest thing to do in Turkey. There are so many new real estate projects and they are all doing great.”
And Keith Bird also had a tip for those looking to expand into the UK: “The power house is social media. When the doors of your restaurant first open, the queues must already be there!”
