Retailing, Franchising, and Consumerism Business Intelligence in China

Carl's Jr Opens First Restaurant in Shanghai

California-based CKE Restaurants Inc. has opened its first Carl's Jr. restaurant in Shanghai.

According to CKE this is the first of more than 100 Carl's Jr. units planned in the municipalities of Beijing, Shanghai and Tianjin, and the provinces of Zhejiang and Jiangsu over the next eight years.

In China, Carl's Jr. is operated by Star Food F&B Management Company, a joint venture between SGX-listed BreadTalk Group Limited, a lifestyle food and beverage group, and Aspac F&B International Pte, the current Carl's Jr. franchisee in Singapore and Malaysia.

CKE Restaurants' entry into the People's Republic of China is part of a strategic plan to accelerate franchise development in international markets and grow the system as a whole. The new restaurant opening in Shanghai is part of the first phase in the company's expansion efforts in China where it sees potential for more than 1,000 restaurants over time. Currently, CKE licenses 332 international restaurants under its Carl's Jr. and Hardee's brands, and plans to double its international presence to more than 665 restaurants within the next five years.

According to E. Michael Murphy, the president of CKE Restaurants Inc., consumers in China have yet to experience the kind of premium-quality burgers that Carl's Jr. has to offer, and their strong success in other Asian countries proves that the market is ready for them.

George Quek, the chairman of BreadTalk Group agreed that the average consumer in China's first-tier cities, having been exposed to a varied offering of Western fast food, is now primed for more discerning menu items such as premium burgers.

This is confirmed by Mason Tan, the CEO of Star Food F&B, who said that in the last five years, there has been a meteoric rise in the demand for overseas premier brands due to irreversible rising consumerism and economic growth. He added that after studying the market, conducting due diligence and finding the right partner, Star Food were very excited to join with CKE Restaurants and the BreadTalk Group to roll out Carl's Jr. as the leading premium hamburger brand in the territories of Beijing and Shanghai.

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