Itsu, the Julian Metcalfe-founded, Asian-inspired brand, will explore a franchise model when it looks to expand internationally, MCA has learnt.
Speaking at MCA’s Food To Go conference, Itsu chief executive Ivan Schofield confirmed that the c70-strong group would make its debut in the US next year with a company-owned site opening in New York.
He said: “We regularly have enquiries about International. From a consumer point of view I have little doubt, the underlying economic model is strong. Having said that International expansion is easier said than done, very few have succeeded to great scale and profitability. So whilst we will be opening in New York next year as a company-owned store other markets will be franchise.
“We are taking our time to test an operating model that we think will work and also starting with the right location. Scale company-owned development is no longer an option. McDonald’s and KFC were able to do this in the past and have achieved incredible scale but the appetite of public investors just is not there today
“It typically take five to seven years to get to profitability, 10 years to get to scale and usually longer before a market is self-sufficient in terms of capital. This means that international expansion is a burden for any organization, but if using franchising, you need franchise partners with a long-term horizon.
“The model I prefer is on in which the brand owner establishes and retains a small presence and achieves scale through Franchising. This model works for everyone because the franchisees see that you have skin in the game and the company keeps control / brand leadership.”
Schofield reaffirmed the belief that the company could eventually grow to up to 200 sites in the UK.
He said: “We have 70 at the moment but with an impressive concentration in London. We certainly see 150 - 200 but I prefer to take it 30 or 40 at a time. 200 would mean having cracked the code outside London, which we are making good progress on.”