Canadian fries' Chinese debut - National Post
HONG KONG - I am in Starbucks about 40 minutes into a conversation with Canadian executives from New York Fries and their new Hong Kong-based franchise partners when a young mainland Chinese man who has been listening from the shadows steps up and wishes the french fry sellers good luck with their new venture.
"I live in England and work in Hong Kong and China, and would be really happy to see another Western food choice here," he says in an accent that's part Shanghai and part South London. "It's good to have something more than McDonalds and Starbucks," he says.
It's exactly what the New York Fries executives are counting on as they prepare to launch their first store here at the end of November. There's no shortage of Western fast food in Hong Kong or on mainland China - all the big chains are here. The range and number of local food choices is staggering too, and runs the gamut from the old women selling dumplings by the side of the road to chain restaurants churning out cut-price noodles.
But regardless of the number of food outlets, it seems there's always an appetite for more. "There's food everywhere here," says Angie Venzon, New York Fries' director of purchasing. Because food choices are "decentralized" - unlike in North America, there are few "food courts" that lock up the key locations even in the malls - there's an opportunity for new entrants to break in, she adds.
The inaptly named food company was founded in Brantford, Ont. more than 20 years ago and now puts its name on 182 outlets in Canada (including seven units that operate under the South St. Burger Co. moniker). The firm is also well on the way to planting the seeds of its Asian operations.
Franchisees Thomas Lau and Ricky Takasu - a young, Canadian-educated team who approached New York Fries last November - secured a location for their first outlet at Harbour City, a higher-end mall on the Kowloon side of Hong Kong harbour. The local franchisees have also secured the rights to develop a minimum of 10 more locations in Hong Kong and Macao in the next five years, but eventually expect to open up to 50, and have Taiwan and China as options. It is hoped some of the 20 million-plus mainland Chinese who visit Hong Kong each year will take the taste home, paving the way for entry there.
Before that, New York Fries needs to make a success of Harbour City, where one of the first things planned is to hand out samples to workers in some of the 5,000 offices in the building above the mall. It hopes the "premium" taste of the product will do the rest.
"No matter what the local tastes are, we are going to win over [Chinese customers]," says Craig Burt, vice-president of operations at the Canadian company.
China and even westernized Hong Kong is not southern Ontario when it comes to menu choices. But New York Fries enjoys strong sales in parts of Canada where the Asian population is strong, such as Richmond, B. C. Head office is projecting the Hong Kong locations will have revenue of $3-million, outselling the average sales figure for a location in Canada.
The Canadian franchise has successfully expanded to Dubai and South Korea, with the first New York Fries opened in South Korea in 1999, and though the company admits to "a learning process" with the original licensee who sold out in 2004, they are now showing sales and unit growth.
Meanwhile, for the estimated 250,000 Canadians living in Hong Kong, the menu will look familiar. There will be local variations to suit the taste of Hong Kongers - more sauces and toppings, including a mushroom sauce, and perhaps different soft drinks - but Canadian favourites such as poutine will be present, too.
Food safety is obviously an issue for anyone operating in Asia, given the proliferation of tainted produce scandals tied to China. Ms. Venzon and Mr. Burt say the production facilities they have seen in Hong Kong so far are up to Canadian standards. Some supplies, including sauces and marketing materials, will be shipped from Canada, and the potatoes will come from the United States - there are plenty of those in China, but none come up to scratch.
Mr. Burt is not worried about launching just as Hong Kong joins the world in an economic slowdown. "Everybody needs to eat - we aren't necessarily as concerned about market conditions as some are," he says. In North America, the company has found it can do more sales in tough economic conditions, as its product is seen as an affordable treat.
The company says it's open to other overseas franchises, although they have turned down options in South East Asia where the available locations and average standard of living didn't fit with the franchise model.