Newspaper article The Canadian Press

A Year after Massive Expansion Plan, Smoke's Ambitions May Prove Daunting

Newspaper article The Canadian Press

A Year after Massive Expansion Plan, Smoke's Ambitions May Prove Daunting

Article excerpt

Smoke's expansion plan may be daunting

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TORONTO - Smoke's Brands, most famous for its Smoke's Poutinerie restaurants, announced a highly ambitious plan a year ago to diversify into other greasy goodness and open 1,300 outlets by 2020.

The task may be daunting.

Since the Ontario-based company announced plans to have 1,300 restaurants operating by 2020, it has 81 open, 39 of which have set up shop in the past year.

"I've been claiming global domination since I opened up that first one ... and nobody believed me," Ryan Smolkin, founder and CEO of Smoke's, said in an interview.

Smolkin says he remains on track to expand to western Europe, the Middle East, Australia and the Asia-Pacific region, adding that he has hit every expansion target since the company's launch in November 2008.

One of the only ways to accomplish such a bold expansion is through master franchise or licence agreements, said Ann Stone, a lecturer at the University of British Columbia's Sauder School of Business and former chief marketing officer at several U.S.-based franchised organizations.

Under such agreements, a master franchiser buys rights to develop a geographic area and can then sub-license Smoke's locations to other franchisees. It's a very popular model in the Middle East, said Stone.

Smoke's, in fact, plans to ink those types of agreements for its 150-store overseas expansion, said Smolkin, with the Middle East or the U.K. likely to be first in line.

But master franchise agreements aren't very popular in the U.S., Stone says, where the bulk of the company's growth is meant to happen.

Hundreds of stores in the U.S., therefore, will be "very challenging" for Smoke's, Stone said.

"I'd say their chances are small."

Smolkin hopes to grow from five restaurants to 800 in America. The company says it won't offer master franchising opportunities in the U.S., but rather multi-unit agreements where one franchisee or more open numerous outlets.

The company has already sold dozens of units to American franchisees with locations going into development. In Michigan, for example, a group of franchisees will open 10 stores over the next three years, Smolkin said. …

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