U.S. burger giant Carl’s Jr. today opened its ninth location in B.C., in Port Coquitlam, and company officials expect substantial growth in Metro Vancouver in coming years.
Since the first Canadian fast-casual burger restaurant opened in 2012, Carls Jr. franchisees have opened 14 more locations across Canada.
William Newell is one of the company’s most ambitious franchisees, given that he intends to have a total of 25 restaurants by the end of 2019.
The Metro Vancouver-based entrepreneur and three silent partners currently operate four locations, including the newest one, at 1940 Oxford Connector in Port Coquitlam.
“We are opening a couple more stores by the end of the year,” Newell told Business in Vancouver.
“Those new locations will be at Guildford [Town Centre in Surrey] and one in South Surrey near the border.”
He is also negotiating for sites in Burnaby’s Metrotown area and in North Vancouver.
“The toughest part is finding real estate,” he said. “We want drive-through locations. Now, with idling regulations, you can’t have drive-through restaurants in a lot of the cities unless [the site] is grandfathered. So, we’re competing against banks because they also want drive-throughs.”
Drive-through restrictions are in place in Vancouver, North Vancouver, West Vancouver and Burnaby, said Newell.
He and his partners' current locations include Chilliwack, which opened in September 2012, downtown Vancouver (at the corner of Howe and Dunsmuir streets), which opened in Janaury 2013, and Abbotsford, which opened in January 2014.
Each of the restaurants costs between $800,000 and $900,000 to launch, Newell revealed.
He said royalties range between 5% and 7% and one-time fees for franchisees are usually between $30,000 and $50,000, depending on how many restaurants are opened.
Newell is originally from Edmonton. He grew up in the Monterrey region of Mexico and later worked for Jr. Foods, which was the first international franchisee of Carl’s Jr. The company opened restaurants in the Monterrey area.
He watched as the chain arrived in his city and started to “pulverize” competitors, such as McDonald’s, he said.
That success inspired him to invest in the chain that, as of April 2015, had 1,385 locations, according to Wikipedia.
Carl’s Jr. is part of CKE Restaurants Inc., which also owns the Hardee’s, Green Burrito and Red Burrito restaurant chains.
Atlanta-based Roark Capital Group bought CKE from Appolo Global Management LLC (NYSE:APO) for an estimated US$1.7 billion in December 2013.
Carl’s Jr. has no Canadian president but its vice-president for Canada, Jeff Branton, is based in Vancouver. He spoke with BIV in late 2012, when he revealed slightly more ambitious plans than have materialized.
