Edmonton proving a popular test market for US chains

US restaurant chains looking to take their first steps into the Western Canadian market are focusing on testing the waters in Edmonton.

In recent months, numerous food and beverage chains such as P.F. Chang’s, Dickey’s Barbecue Pit, California Pizza Kitchen, and convenience store giant 7-Eleven are focusing on the Albertan city as a launchpad for expansion.

Popular Texas-based chain restaurant Dickey’s opened its first Canadian location in Edmonton on Thursday, April 28 with customers lining up since 5 a.m., reports CBC.

The propensity for Texas-style barbecue restaurants to look to Edmonton is perhaps not too surprising, considering that Alberta is sometimes referred to as “the Texas of the north”. Similarities are drawn particularly between the two jurisdictions’ approaches to oil and beef.

“Alberta in general mirrors Texas,” said Jim Perkins, Dickey’s vice-president of international sales and support. “It’s entreprenuerial, it’s been based on petro-chemical and cattle. Those two things are exactly how this brand started 81 years ago in my country, so why not here? We’ve done our research from province to province across Canada. That helps us win here.” said Jim Perkins, the company’s vice-president of international sales and support.

But it’s not just purveyors of that style of cuisine who are looking at Edmonton.

American-style Chinese chain P.F. Chang’s will open its first Western Canada restaurant in the Edmonton area, as will California Pizza Kitchen, which will open its first Canadian location in south Edmonton sometime this year.

Meanwhile, in December, American convenience store chain 7-Eleven opened a licenced location in north Edmonton that includes a dining area for liquor consumption on the premises.

Industry experts say the city’s population demographics, eating habits, affordability and even the presence of a giant mall are factors in attracting businesses keen to test the taste buds of Canadians. Those factors have attracted restaurants in the past, with chains like Red Robin and Outback Steakhouse having already rocked up in the city in past years.

“Edmonton is a very good place to start because you limit your risk and you get a good market test,” Ziad Kaddoura, a franchise consultant based in Edmonton, told CBC’s Edmonton AM. He added the city is a great place to figure out whether companies are up to the challenge of introducing a franchise in Canada, and noted the province has the closest cultural population makeup to the U.S.

Toronto and Vancouver aren’t deemed particularly suitable test markets as they’re too big for many companies to figure out what works and what doesn’t. 

Edmonton is comparatively less saturated and also has a far more affordable real estate market. Kaddoura, a former franchise owner and franchise seller, said that a 3,500-square-foot space in a neighbourhood like Windermere, where Dickey’s is setting up shop, could cost $12,000 a month in fees, leases, and rent compared to between $20,000 and $25,000 in a suburb of Toronto. “So I think it ticks all the right boxes,” he added.

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