Since Teriyaki Experience was founded in 1986, the Toronto-based company has grown from a local Japanese quick-service concept to a 135-unit international chain. As consumers around the world become increasingly health conscious, the company’s low-fat, made-to-order offerings have found success at home, as well as in the Middle East, Europe, Central America, South Africa and the Caribbean. The chain has recently begun expanding into the United States and has plans to grow its presence in the country in the coming years. Teriyaki Experience president and chief operating officer Nick Veloce talked to NRN about the company’s expansion strategy.
Education: bachelor’s in economics, McMaster University, Ontario, Canada
Hometown:
Burlington, Ontario
Career highlights:
being with Teriyaki Experience for 25 years; seeing the company grow and succeed internationally
Personal: married, two daughters
Hobbies: golfing, skiing, spending time with family
What made you decide to expand into the United States?
For us, the U.S. is a big opportunity. Yes, there’s a lot of opportunity in Canada, but Canada is still a very small market, and it’s spread out in a very large landmass. In the United States, we have the opportunity to get far more density in a smaller space, which obviously [provides] benefits and economies of scale for us.
It’s also a huge opportunity in that we feel that the American market is now catching on to healthy eating. It’s becoming more and more of an issue — more and more of a concern.
Only eight of the company’s 250 intended U.S. locations have opened since 2007. Are franchisees running into financing issues?
When we started, it was very difficult to get financing. Today it is getting a little bit easier. From that perspective, it has been tough, and it has actually slowed our plans down in terms of timing. It hasn’t really changed the outlook for us, but it’s just put it over a longer period.
But the positive side of it has been the real estate opportunities are abundant right now. Rents are reasonable compared to years ago, and the number of opportunities out there is certainly better than a few years ago, so it’s been a good and bad situation.
The timing now is all coming together. We feel that the market is changing. We’re starting to see some growth in our same-store sales. We’re seeing some nice growth, actually, so we’re certainly seeing a change in the atmosphere at the unit level. Quick service is not as impacted as a fine-dining category. We’re still a $7, $8 item, so we’re not feeling it that much. And certainly, from an investment perspective, we’re starting to see the banks a little more receptive to potential franchisees, which is a very positive thing for us because it’s going to help us fuel our growth. Next year we should be looking at about 10 or 15 units that we should be able to open, and then we certainly see 25 to 30 a year after that.
How would you characterize business in your key markets in North America?
Our category is one of those categories that’s probably the least impacted from economic reasons, only because people tend to trade down. If they were frequenting family dining, then they’ll come down a notch to quick service. We’re not your traditional fast food; we put ourselves a notch ahead of that, so we’re in between family dining and fast food.
We’re certainly seeing some trading down with the economic issues. But as far as the feeling out there, 2009 was probably a tougher year for us as a company on both sides of the border, whereas 2010 has been very positive. We’ve seen customer count increases; we’ve seen sales growth. So we’re seeing a positive trend, and we feel that we’re going to continue to see that trend well into 2011.
