On Monday, Johnny Rockets announced an expansion deal that will bring 100 units to China over the next 10 years, marking both the largest development deal in the brand's history as well as its first foray into China.
The first unit is expected to open in early 2016 in one of China's largest markets, likely Shanghai or Beijing, says Scott Chorna, Johnny Rockets’ senior vice president of international development. He expects two to four units to be completed in the 12 months following the initial location's opening, with development to ramp up in the later years of the agreement.
Johnny Rockets will target high-visibility retail areas in the major cities of China, Chorna says, made possible by the brand's partnership with a joint venture between AUM Hospitality and Parkson Retail Group. The opportunity to enter China came through Johnny Rocket's existing partnership with AUM Hospitality in Malaysia, where the company operates six Johnny Rockets, and AUM Hospitality’s own joint venture with Parkson Retail Group. Parkson Retail Group is also based in China and operates an extensive network of more than 130 department stores, including more than 60 in China.
Much of the future expansion in China will rely on how the first few units perform. Working with AUM Hospitality and Parkson Retail Group, Johnny Rockets will open units in high-visibility shopping centers and retail streets, focusing on commercial, urban settings. As the company sees who its customer base is in China, it will plan its second stage of development accordingly.
Chorna says Johnny Rockets had been eyeing the Chinese market for a while due to its dominance as a high-image market, its large population, and its fantastic economic development. In entering a new market—Johnny Rockets is in over 26 countries already and operates more than 125 stores outside the U.S.—Chorna says Johnny Rockets considers population, GDP per capita, and the food and beverage environment in that market.
"We don't have any locations in the [Chinese] market yet, but we think there is some awareness," Chorna says. "Many Chinese people who have traveled—and the amount who have gone on international trips in the last 10 years has exploded exponentially—whether they went to the big cities like New York, L.A., and San Francisco or to other international markets where we have a presence, they've hopefully already experienced and seen the brand and enjoyed a meal at one of our restaurants."
In the U.S., Chorna says, Johnny Rockets is a mature brand that has gone beyond its full-service modely by identifying non-traditional real estate, such as airports and casinos, while also testing a quick-service model that has drive-thru versions as well as a drive-in movie style. While the initial development stage will build the traditional, full-service Johnny Rockets, Chorna says the brand will evaluate afterwards and see whether its other models might also fit into the Chinese market.
By Sonya Chudgar