Brinker International Inc.
), recently unveiled its Chili's Grill & Bar restaurant in San
José, Costa Rica. This marks the company's debut in the Costa Rican
market. Located in the Centro Comercial Multiplaza in San José, the
230-seater new unit was developed by franchisee, CRB Restaurants, a
privately held company.
Brinker, the parent company of Chili's Grill & Bar and
Maggiano's Little Italy, had entered into a deal with CRB
Restaurants that enjoys considerable local market knowledge. Per
the deal, CRB Restaurants will develop seven more Chili's
restaurants in Costa Rica over the next five years. Both parties
plan to unveil the second unit of Chili's in December 2012.
The above mentioned deal affirms management's intent to make Costa
Rica one of the prime markets for Brinker's expansion. Brinker
believes that the population in Costa Rica has an inclination
towards renowned dining brands, which makes the region a potential
market for new openings. Further, a huge section of American
retirees reside in that country. Dallas-based Brinker seeks to tap
this opportunity in full.
The company will revamp Chili's menu in San José, incorporating
various location specific ingredients like Lomito, a traditional
Costa Rican cut of beef, and Patacones, a staple treat made of
fried plantains to enhance the brand's appeal. However, other
signature offerings of Chili's along with a variety of
non-alcoholic and alcoholic beverages will also be available.
Brinker has been on an expansion spree for quite some time. Besides
spreading its wings in the home country, the company also aims to
explore the opportunities in the foreign lands. Hence, it is
emphasizing on global expansion in both new and existing markets
through development agreements with new and existing franchisees as
well as joint venture partners.
The burgeoning middle income population in emerging countries
encourages the company to shift its spotlight from the somewhat
saturated domestic market, where the bar and grill segment is
hyper-competitive. Brinker currently has 260 chili's restaurants in
32 countries and two territories outside the U.S.
The company is also in a joint venture to extend its footprint in
Brazil. As part of this venture, Brinker made its Brazilian debut
in the first quarter of 2012. The company's presence in Mexico and
the Middle East remained strong.
Additionally, it plans to further penetrate into Latin America.
With a focus on BRIC market, Brinker anticipates to add 30 or more
locations in fiscal 2013. Its long-term goal includes the opening
of 420 Chili's restaurants globally by fiscal 2015.
BJ'S RESTAURANT (BJRI): Free Stock Analysis
BRINKER INTL (EAT): Free Stock Analysis Report
KONA GRILL INC (KONA): Free Stock Analysis
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Brinker, which competes with
Kona Grill Inc.
BJ's Restaurants Inc.
), currently retains a Zacks #2 Rank, which translates into a
short-term 'Buy' rating. We are maintaining our long-term
'Outperform' recommendation on the stock.