Korean Based Chain Seeks a Joint Venture Partner in Eastern China
Services Provided: Partner Selection
The Challenge
The large Korean full-service restaurant group with multiple concepts was very active in China for over 10 years with minimum success. They decided to change strategic direction and seek out a joint venture partner to develop the East Coast of China. As part of their meticulous planning, they hired CSA to help them evaluate various candidates for optimal joint venture partner selection.
Our Solution
After reviewing all their key concepts, we proposed a new store prototype that focused on Korean stew (budae jjigae) as well as several other complementary main menu items such as fried chicken, pig’s foot (Jokbal) as well as sides. The new prototype has a low investment cost, very compact kitchens and an efficient labor model. Previous stores in China were much larger and sold almost all popular Korean dishes including barbeque, which made it difficult to differentiate itself from competitors.
After a prolonged partner search, we were able to identify a very well capitalized local partner in Shanghai who shared the same vision and was enthusiastic to proceed.
Results
Currently, more than 25 stores are operating after the initial 18 months and 100+ stores are planned over the next 3-5 years in nearby provinces. Store-level EBITDA margins are within the target ranges and they continue to improve as more stores are built. A successful scalable concept has been developed with good long-term growth prospects.
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