Johnny Rockets Group Inc. continues to seek fresh territory for its international expansion, with plans to add Colombia and Tunisia to its international roster of Americana-themed diners in 2014.
They will be the first units in each of the countries.
The Aliso Viejo-based burger specialist—which has 327 restaurants, including 31 that are company-owned—was founded 28 years ago and will be in 28 countries by year-end. Its total sales were estimated by Chicago-based restaurant consultant Technomic Inc. at about $316 million, good for No. 46 on this week’s list of biggest private companies based in Orange County (see list, page 12).
The chain now has about a third—112—of its restaurants in overseas markets. It’s counting on the international operations for two-thirds of its growth in locations this year, which would continue the rapid pace of recent years.
“It’s definitely a challenge,” said Scott Chorna, senior vice president of international development.
The first international Johnny Rockets opened in Mexico in 1993.
It had 40 units in 10 foreign countries five years ago.
The company plans to open 22 more overseas locations by the end of this year alone, bringing its 2014 total to 38.
International expansion began to pick up steam in 2007, when McLean, Va.-based Red Zone Capital Management bought Johnny Rockets from two private equity firms.
Red Zone formed an international division in 2012 and sold the chain to Boca Raton, Fla-based Sun Capital Partners Inc. a year later.
Sun Capital brought on restaurant industry international operations veteran Chorna seven months ago.
He helped develop brands such as Cinnabon and Auntie Anne’s Pretzels internationally.
Johnny Rockets’ initial target for international growth has not been Europe, Chorna said.
It currently has one location there, in Germany, and plans more in the region eventually.
The more immediate focus is on the Middle East, South America, Africa and Asia, which account for the vast majority of its international lineup.
“It’s an all-American concept, and the allure and exotic nature of that is more attractive the further away from America you are,” Chorna said.
Fewer Competitors
The chain also gets the benefit of fewer competitors in the overseas markets it enters.
“Johnny Rockets has a lot of competition in the U.S., but it’s a unique Americana brand that exports well, and that’s one of the reasons they’ve gone overseas,” said Alan Liddle of trade publication Nation’s Restaurant News.
Some of the hurdles it faces in other countries include cultural and religious differences, sometimes in the same country, as well as language barriers.
“In China they eat one way in the north and another in the south,” he said. “In Nigeria the official language is English, but in Tunisia they speak Arabic and French.”
Other tests include geography, taxes and import duties, product quality and connecting the “American” aspect of the brand to local experience, according to Chorna.
He said finding a good local partner is key.
“You can’t be an expert on 28 countries,” he said.
Johnny Rockets has had to cancel only a few such agreements.
The biggest issue for a burger chain is sourcing beef.
That particular problem can also be different in different countries, he said.
Japan was focused on health issues, while in Brazil it was a matter of protecting the local economy, Chorna said.
“We need to ensure quality in all our stores throughout the world.”
