MANILA, Philippines – Pancake House Inc., the country’s largest casual dining chain, will put up 30 new branches in the Philippines while expanding its market reach to the Middle East and Southeast Asia.
The local dining industry still has room for growth, prompting the group to prepare for an acquisition next year, its top official said.
“Locally, across Yellow Cab and Pancake House, we are building 30 new stores this year,” Pancake House CEO Martin P. Lorenzo told reporters.
He said 30 percent will be in Metro Manila and 70 percent in new wave cities and tourist hubs like Cebu, Cagayan de Oro, Baguio and La Union.
“We will end the year with about 330 stores [nationwide]. Abroad, we should have 20 by the end of the year,” Lorenzo said.
Pancake House will spend P150 million for the establishment of new company-owned stores, accounting for 55 percent of the expansion program, while the remaining 45 percent will be through franchising.
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Last year, the restaurant group that serves 30 million meals annually added 25 new branches, backed by a P120-million capital spending.
For its overseas expansion, Pancake House relies on franchising.
Lorenzo said Yellow Cab has signed a franchising deal that aims to put up 15 new stores in the United Arab Emirates in the next three years.
“We’re surely growing in the Middle East for Yellow Cab and Southeast Asia for Pancake House,” Lorenzo said.
To date, there are three Pancake House branches in Kota Kinabalu, three in Kuala Lumpur and one in Johor, all in Malaysia.
Pancake House is also launching Teriyaki Boy in Hawaii. Its international franchise team was already sent to the East Coast while there are already franchising applicants for Dencio’s in Toronto.
“I am very encouraged in the Middle East, Southeast Asia and even in the Philippines like in new wave cities and tourist destinations,” Lorenzo said.
Pancake House expects to grow its profits by 45-50 percent this year. In 2012, its net income surged by half to P149 million from P99 million in 2011.
Robust growth will be driven by higher same-store sales and contributions from stores opened last year, Lorenzo said.
In terms of acquisitions, Pancake House will return to the market next year.
“We will be looking to acquire brands next year,” Lorenzo said, adding that the company is interested in a casual restaurant chain with P2 billion in systemwide sales.
In September 2011, Pancake House acquired local premium pizza brand Yellow Cab for P800 million, expanding the group’s portfolio that includes Kabisera, Le Coeur de France and Sizzlin Pepper Steak.
In the first quarter, strong food sales in both new and existing branches allowed Pancake House to grow its earnings 22.2 percent to P40.6 million from P33.2 million a year ago.