Freshii CEO discusses move into China

Introducing Freshii to new customers

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Are China’s coastal cities where you’re mostly likely to find middle-class customers for whom Freshii could make healthful eating convenient?

I think there’s a place for our concept there, but we’ve got to be smart and enter in similar ways that we would enter any country, with the same real estate strategy. It actually doesn’t matter that consumers know who Freshii is. What’s important is that we’re the convenient option and the path of least resistance for the customer who’s looking for something healthful. We’ll be located in office parks and such, where people might be thinking more healthfully.

Part of our entry to China is obviously the consumer side — you can only go into China with a brand that’s conducive to the target consumer — but we have a development strategy as well, and a model that’s conducive to scale. We need to be able to execute in small footprints, and that’s what we’ve been doing for years in North America. We open small locations and push large sales per square foot out of them, which makes us confident we can do the same thing in China. A lot of brands take several years to find their way in foreign markets, but I think that’s because they had problems with the unit-level P&L.

What made ICON the right franchisee for China? Do you worry at all about not having a corporate employee on the ground in there to ensure food safety and other compliance?

ICON approached us, and as we got to know them for months, we found out we’re well aligned. They have operating partners born in the United States but who have done commerce in China their whole lives. One of them grew up in Southern California, but he’s done business in China for 20 years, so he knows how to adapt Western brands to the Chinese market. They have operations experience with brands with nice track records in China, high-scale franchising and within small footprints. They’re also philosophically aligned and passionate about health and wellness.

But the reason why we put this aggressive development schedule in place there is because we also intend to execute on having a corporate representative in the China market to work alongside our local partners until we believe they’re all absolutely on the right track. Whether we have somebody there or not, we needed to pick a partner that gets that doing the right thing is the only way to go.

Contact Mark Brandau at mark.brandau@nrn.com.
Follow him on Twitter: @Mark_from_NRN