Retail Traffic
British Chain Prepares for U.S. Invasion

British Chain Prepares for U.S. Invasion

At a time when Americans are beginning to eat out again, with restaurant industry sales projected to reach $631.8 billion in 2012, according to the National Restaurant Association, the fast casual segment is growing, with both existing brands expanding their fleets and new chains entering the market. YO!Sushi has been serving customers in the U.K. since 1997, but this year, the chain will open its first restaurants in the United States.

YO!Sushi is a fast, casual concept that serves Japanese-inspired dishes, including sushi, sashimi, maki and nigiri, using both the conventional sit-down-and-order model and a moving conveyor belt that gives the option of self-service to customers in a hurry. Given U.S. shoppers’ healthy appetite for restaurant food and the absence of an established restaurant leader in the sushi category here, the chain’s executives feel this is an opportune time to start opening locations in the U.S., according to Alison Vickers, business development director with YO!Sushi.

Power in numbers

The way YO!Sushi is charting its expansion stateside is similar to the strategy Dunkin’ Donuts has been using to gain market share in Western states. YO!Sushi’s executives made the decision to open all international locations through franchise agreements to ensure the people running them have a good knowledge of the local markets. But instead of signing deals on a one-by-one basis, they have established a minimum number of restaurants—five—that franchisees have to open in order to be approved.

So far, the chain has closed its first agreement with a Washington, D.C.-based franchisee for 10 restaurants located throughout Washington and Philadelphia, the first of which are scheduled to open this summer. Vickers says further plans call for YO!Sushi to sign two more 10-site franchise deals over the next 18 months. Ultimately, there might be an opportunity to open up to 400 YO!Sushi locations in the U.S., she notes.

“But we are not looking at the numbers right now, we are looking for the right partners,” she adds.

The company prefers partnerships with franchisees that have previous restaurant-operating experience and a deep familiarity with their markets.

Partners in action

To help it find appropriate locations, YO!Sushi hired Baum Realty Group, a Chicago-based brokerage firm specializing in both tenant/landlord representation and franchise services, whose clients have included Starbucks, Chipotle and Panera. The chain’s restaurants work best in urban environments and it’s currently searching for sites in Chicago, Miami, Dallas and Boston. YO!Sushi prefers three types of locations: at airport terminals and other transportation venues, on high streets in areas with high-density populations and within large, upscale malls and shopping centers.

Because YO!Sushi is not a destination venue, it needs to be near other retailers that are traffic drivers. A good example is its restaurant at Westfield London, a 1.6-million-sq.-ft. regional mall near two London underground stations that houses tenants including Apple, Marks & Spencer, Topshop and House of Fraser. In the U.S., good co-tenants for the chain would be department stores such as Nordstrom, fashion retailers like Anthropologie and Forever 21 and popular grocers Whole Foods and Trader Joe’s.

Just as importantly, “we don’t want to go into the corner [somewhere], we want to be in the middle of the center,” says Vickers, who notes that in some cases YO!Sushi takes spaces right in front of bigger retail establishments in the malls’ common areas rather than leasing an in-line shop.

The chain already has an established relationship with mall owner Westfield because of its restaurants at Westfield London and Westfield Stratford London. But YO!Sushi has also been in discussions with executives at Taubman Centers and Simon Property Group about opening venues inside their malls.

“We need heavy footfall, but we also need quality retail around us, so getting the right location that’s prominent and is on the right corner is a challenge,” says Vickers. “But we have some really good opportunities coming up and some of the big mall landlords are very receptive to the brand.”

YO!Sushi is targeting locations in areas with annual household incomes of at least $70,000, with most of its customers falling in the 35-to-54 age range. Its restaurants take up anywhere from 900 sq. ft. to 3,500 sq. ft. of space and need to be on one level because of the conveyor belt.

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