Pizza Hut, KFC Franchisee Taps Into ‘Fast Casual’ with Panera Deal
One of the largest franchise operators of Pizza Hut and KFC locations in North America has scooped up most of the Panera Bread bakery-cafes in Ontario, with plans to grow the fresh soup and sandwich chain across Canada.
Woodstock, N.B.-based Franchise Management Inc., or FMI, announced Wednesday the company will assume ownership and management of 12 Panera outlets, mostly in the Greater Toronto Area.
“FMI is eager to bring its operations expertise to support the Panera brand in Canada,” said FMI’s marketing director Matthew Leech before meeting with Panera store managers in Toronto.
“We see a huge opportunity here and foresee immense potential to grow and extend Panera across Canada,” he said.
Panera Bread – which has nearly 2,000 locations in the U.S. – is known for its fresh-baked breads, soups and hand-crafted salads and sandwiches, and competes with Chipotle and Starbucks in the “fast casual” arena with better quality ingredients at a slightly higher price point than fast food.
“We were looking to get a stronger foothold in the breakfast and lunch market,” Leech said.
Though FMI’s expertise is in operating Yum Brands’ fast food outlets like Pizza Hut and KFC along with gas station convenience stores, Leech says consumers are increasingly looking for healthier options.
“That trend — the healthy aspect — is very hot and very relevant both in Ontario and Canada,” he said.
Though he declined giving actual numbers, he says they’ll be adding more locations in 2018.
Robert Carter, executive director of food service at market research firm NPD Group, expects FMI will launch another 40 to 50 Panera Bread outlets across the country, starting in Ontario, over the next four years.
“It’s a really good start-up move for them to make in the whole ‘on-trend’ direction of fresh, ethically-sourced food,” Carter said.
The purchase includes the Panera Bread locations in Don Mills, Richmond Hill, Markham, Mississauga (Square One), Oshawa, Whitby, Ajax and Aurora in the GTA as well as Barrie, Ottawa, Belleville and Kingston.
There are currently 19 Panera Bread bakery-cafes in Ontario. Six not included in the deal are owned by another franchisee with the exception of Yonge-Dundas location, which is corporately owned.
“Given FMI’s local market knowledge and track record of successfully purchasing and growing U.S.-based concepts in Canada, we cannot be more excited to welcome them to the Panera family,” said Michael Bufano, Panera Bread’s chief financial officer.
“We expect they will be great partners for us for years to come,” he said in a statement.
FMI has 5,000 employees and currently owns and operates more than 225 restaurants in Ontario, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Arkansas, Missouri, Louisiana, Mississippi, Illinois and Indiana.