Pret A Manger enters joint venture with franchisee to extend US growth

Dive Brief:

Pret A Manger entered into a joint venture partnership with existing franchisee Dallas International to accelerate the sandwich and coffee chain’s U.S. expansion, the company said Friday in a press release.
Dallas will assume control of 50 Pret shops within New York, Pennsylvania and Washington, D.C., and will open at least 10 new shops on the East Coast by 2026. The joint venture will lead to the creation of a new company, Empire JointStar Inc., but will not include existing franchise shops in the aforementioned markets.
Late last year, Dallas, which operates eight Pret units in the U.K., also agreed to develop a minimum of 40 units over several years in Southern California. The franchisee opened a location in New York’s Hudson Yards earlier this year.

Dive Insight:

Dallas plans to refurbish an unspecified number of shops and work with the chain to create new shop designs, like drive-thrus, the company said. Pret, which closed 17 units in the U.S. during the pandemic, reported that U.S. shop sales have rebounded and are growing. The company plans to continue developing shops in the U.S. and Canada through a mix of equity-owned and franchisee-agreed shops, the company said.

“We have huge ambitions for Pret to become a more globally recognized brand that is working in partnership with our franchisees to unlock significant growth in new markets,” Pano Christou, Pret A Manger’s CEO, said in a statement. “This approach has driven significant growth in Europe and Asia and enabled Pret to track ahead of its mid-term global growth target to double the size of the business by 2026. We look forward to replicating these results in the United States.”

Through its Dallas partnership, the company expects four shops to open in California during the first half of 2024. Dallas will operate over 60 shops in the U.K. and U.S by February 2024 and 100 shops by 2026, according to the press release.

Pret said it could also expand into new states through separately operated franchise agreements, with Pret maintaining ownership of the brand, marketing, food and logistics. The company plans to reopen its Chicago market soon and plans to further grow in Texas, Florida and Washington state. The chain has over 600 units across 15 countries and operates nearly 60 shops in the U.S.

Pret joins a growing number of cafes and coffee houses that are planning rapid U.S. expansion, including Caribou Coffee, 7 Brew and Dutch Bros. Caribou Coffee, for example, opened up domestic franchising in 2021 and quickly signed agreements for 300 units. Dutch Bros, which has over 750 units, is targeting 4,000 units within the next 15 years.