Johnny Rockets in KL orbit

ASIAN EXPANSION: American restaurant chain plans to open 10 to 15 outlets over next 10 years

AMERICAN restaurant chain The Johnny Rockets Group Inc is set to establish a presence in Malaysia, its third location in Southeast Asia, due to its resilient economy and bullish market.

The group yesterday inked a franchise agreement with AUM Asiatic Restaurants Sdn Bhd to open between 10 and 15 outlets in Malaysia over the next 10 years.

AUM Asiatic, a unit of F&B outlet operator Entity B Group of Companies, plans to open Johnny Rockets outlets in the Klang Valley, Penang, Johor, Sabah and Sarawak.

"There is tremendous opportunity in Malaysia's food and beverage (F&B) industry. We have been exploring the market since 2008, looking for a franchise partner," said Johnny Rockets international division president Steve Devine.

Johnny Rockets, popular for its hamburgers and milk shakes, opened its first outlet in the United States in 1986. Today, it has more than 300 outlets in the US, the Middle East and Asia, with 90 per cent of them operating under a franchise arrangement.

Devine told Business Times that the group is mulling to have some 600 outlets under its banner over the next four to five years, with more openings in the Middle East, Asia and Russia.

"We have expanded in the US and Middle East. We are now looking at Asia and Latin America as a new growth chapter for Johnny Rockets. We are not in Europe as the economy there is not resilient. It is not ready for us to franchise," he said.

"Despite the global recession, our business is growing. Through our international expansion, we found that there is demand for our brand. It is our continuing strategy to expand into Asia," he added.

Johnny Rockets already have footprints in South Korea, Indonesia and the Philippines and the next step is to enter into the Malaysian, Cambodian, Vietnamese, Thai, Singaporean and Bangladeshi markets, he said.

Entity B group general manager Frank Lim said it plans to open the first outlet in March next year, either in an established mall or a good standalone suburb location in Kuala Lumpur.

Lim said AUM Asiatic will work with international property consultancy CB Richard Ellis (Malaysia) Sdn Bhd (CBRE) to source for good locations with high demand for American food.

CBRE managing director Allan Soo said Malaysia's F&B industry is growing rapidly and he estimates it is worth between RM3.5 billion and RM4 billion, not counting hotels and un-organised retail like stalls.

"In the past, 10 per cent of retail outlets in a mall comprised of F&B. Today, it has reached 30 per cent. There is an increase in depth and breadth," he said.