Consistent with its strategy of enhancing its North American
Famous Dave's of America Inc.
) announced the opening of its first restaurant in Canada. The new
restaurant in Winnipeg, Manitoba debuted on July 16.
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Manitoba's $1.8-billion restaurant and foodservice industry is the
fourth-largest private sector employer in Canada. The high-demand
and high spending customers are major catalysts for this emerging
restaurant market. Manitoba's capital and one of the largest cities
in Canada, Winnipeg, already boasts a class of renowned restaurant
The Wendy's Company
Burger King Worldwide, Inc.
). Moreover, restaurant opening in Manitoba is expected to increase
by 10% in the next five years.
Famous Dave's inked deal with a Canadian franchisee, Tribal
Council's Investment Group of Manitoba Ltd. (TCIG), for the new
store opening. TCIG, a well known diversified investment holding
company, is owned by seven First Nations tribal councils of
Manitoba. The company owns and operates the area franchise rights
for Wok Box, a well-known Asian quick-service chain of restaurants.
Situated in the Reenders Square shopping centre, at the
intersection of Lagimodiere Boulevard and Reenders Drive, the new
restaurant offers casual and private dining experience to
customers. The 200-seat restaurant will feature the legendary
Famous Dave's barbeque and its top class guest service experience.
Famous Dave's is on an expansion mode in North America. Along with
the new opening, Famous Dave's expects to open around 400-500
restaurants overall in Canada, Mexico, Puerto Rico, etc.
Canadian economy is growing at good pace, with its restaurant
industry providing around 4% of overall revenue annually. The
increasing number of Quick Service Restaurants (QSRs) in the region
and rising inclination of the baby boomers and young adults to
spend on dining outside home are major growth catalysts. The
consequent demand for world class restaurants in this area has
caught the attention of Famous Dave's.
However, the company should be wary of its competitors. Renowned
US-based restaurant chain companies - including
Yum! Brands, Inc.
) - already have a strong presence in Canada. One of Famous Dave's
Buffalo Wild Wings Inc.
), is poised to beef up its portfolio in the region, with the
opening of its first restaurant in Canada last year.
Minnetonka, Minnesota-based Famous Dave's owns, develops, operates
and franchises full-service and counter-service restaurants under
the name- Famous Dave's across the United States. As of April 25,
2012, the company owned 53 locations and franchised 133 additional
units in 35 states.
The company will likely release its second quarter 2012 earnings on
July 24. The Zacks Consensus Estimate for the second quarter is
pegged at 26 cents per share. We presently have a long-term Neutral
recommendation on the stock. Also, it carries a Zacks #3 Rank
(short-term Hold rating).