It was a sure sign that Wagamama had achieved its place among London’s great restaurants.
Last month, the cheap noodle bar chain beat the crème de la crème of the capital’s eateries, including celebrity favourites Nobu, The Ivy and Gordon Ramsay, to the accolade of best London restaurant.
Wagamama chief executive Ian Neill was gracious about his company’s victorious rating in the 2006 Zagat’s guide – London’s restaurant guide bible. “It’s cool to get value for money. People will still want to go to Nobu, but they can’t go all the time and they will get good food if they come to Wagamama.”
Given that the chain has been around since 1992, market commentators believe it is the unique nature of the brand that is helping Wagamama’s success and longevity. “It’s a very distinctive brand with its canteen style eating, fresh food and quick service that has given it a surprisingly long life. And definitely, it would be easy to transport it abroad,” says Trevor Watson, senior partner at Davis Coffer Lyons.
And abroad is where the chain, originally founded by Michelin-starred restaurateur Alan Yau, has gone. The drive to start opening internationally began seven years ago, and has continued at a steady pace. Apart from the 21 branches in the UK, Wagamama has 15 international units with a further five planned for next year.
So far, Belgium, the Netherlands and Ireland represent the European forays – the other international units are spread across Australia, Dubai and New Zealand.
Despite the latest opening, Wagamama is taking its time establishing in Europe. The first was in 1998, but it took four years for the other two branches to open. This tactic has earned praise from market observers. “The group has one of the best orchestrated expansion programmes in the business. They are very selective about sites, and they have to be applauded for that,” says Trevor Shelley of Shelley Sandzer.
Paul O’Farrell, Wagamama’s commercial director, says the company has always been very careful not to get distracted from its core business in the UK. “We have built our franchise business slowly, so as not to have an impact on our UK business. We have now a bigger restaurant base to work from and can start to increase our franchising development. People who buy into a franchise have high expectations from the parent company by way of service and support.”
There is also the problem of feeling out a market that hasn’t seen many successful UK chains transport to the European mainland. Brand awareness has been the problem with many.
While O’Farrell concedes real estate issues “are much the same as when you are trying to establish a new business in the UK”, he does add that “although there is good recognition of the Wagamama name, a lot of landlords and developers will not quite understand what the Wagamama concept is”.
When asked if the problem was that Wagamama’s concept of being a “novelty-type restaurant”, which is too different for Europe, O’Farrell says no, not at all.
“It’s not a question of being a novelty-type restaurant. If you have not been in a Wagamama restaurant or, say, have eaten there only once, then when you are in a different country with no real comparison type restaurants, its difficult to understand the dynamics of the business,” says O’Farrell.
The chain has found a number of ways around this. Firstly, it looks for a good local operator who can demonstrate a visible record of success. Secondly, there is a necessary understanding of the local scene. “There are plenty of people around with money to finance our restaurants. However, we are not interested unless they have an equity partner who is a restaurateur,” says O’Farrell.
Lastly, “Wagamama always sends somebody across early to help our franchisees buy the right goods and that conform to our specification.” O’Farrell believes it is important to start this process early so that all sources of supply are identified well before opening.
“It is always possible to get more or less what you want. But, sometimes, the price may be a problem.”
A consistent menu
These are lessons that were put into play when the first Ireland branch was opened in Dublin in 1998. “Originally we reacted to an enquiry from Dublin. We liked the people, [franchisee] as they were committed to what we do. They had existing, well-run operations and were well financed. We thought we could learn from the process.”
One obstacle that has tripped up chains in the past, but does not seem to have affected Wagamama, is the menu. “The menu, say in Amsterdam, is pretty much so. With some slight regional variations to accommodate for local tastes,” says O’Farrell.
The European expansion has continued with the Netherlands’ second restaurant in the northern town of Groningen opening this month.
The only place the company has yet to spread its tentacles is in the US – an equally notoriously hard market for UK names to break into. Past failures of UK brands include PizzaExpress and Belgo, while Pret A Manger suffered huge problems following its entry into the New York market in partnership with McDonald’s.
Branching out
But O’Farrell has not been put off by the woes of such giants. The company is set to devote the next 18 months to opening there.
“We have been looking at North America for some time and when the right opportunity presents itself we will do something there. It is a big market and we have to make sure that we are comfortable with our development strategy for this market.”
Like its European branches, the company is going to tread carefully. “Going straight to New York is a big ask. We prefer to start elsewhere. La Tasca have chosen Washington to enter the market. This is manageable and we would look to a similar-sized city on the east coast.
“It puts less pressure on the business and allows you to develop at a more manageable pace.”
And there is no doubt that the chain will keep expanding, although it is realistic about where it can open. “We think our product is universal and it will work wherever it is taken. However, there are some countries that will not be economically viable for a Wagamama.” As to which countries those are, O’Farrell declines to say.
|
|
|
●Find a good local partner who can demonstrate a visible record of success – not only will it help cut through the red tape, but they will also know where best to locate ● Understand the local scene – make sure enough market research is carried out. Spain is a different market from France, and the same for Holland and so on ● Always send a member of the UK-based business across to the new opening early. This is to help franchisees buy the right goods that conform to your specifications ● Is your name okay? Your name may be well known in the UK, but don’t automatically expect it to be the same on the Continent. Also, check what the name of your group means in other countries’ languages |
