A battle between sandwich restaurants is emerging in Canada, with the arrival of two new American banners.
Inspire Brands announced Wednesday that its Jimmy John’s banner will use a franchise model to expand out of the United States this year with a restaurant in the Greater Toronto Area and others to follow across the country.
At the same time, Redberry Restaurants said its Jersey Mike’s Subs banner, which already has two locations in Ontario, plans to open more than 300 Canadian restaurants by 2034. Some will be franchises, others will be owned by Redberry, which owns and operates more than 180 Burger King and Taco Bell restaurants.
Both companies are known for their customizable submarine-style sandwiches, served with sides like chips and cookies. At Jimmy John’s, diners can also opt for wraps or an “unwich,” a sandwich that uses lettuce instead of a bun.
They will join a number of local and foreign sandwich companies with years of business in Canada.
Joanne McNeish, an associate professor of marketing at Toronto Metropolitan University, said the news is “exciting” for the Canadian market, but the big question is whether these brands have enough traction in a new market.
“There’s some assumptions, especially regarding the Canadian market (from some American brands), that, ‘Oh, they’re like us, so they’ll eat the same thing,'” she noted.
“First of all, our population is much more diverse than theirs […] Second, these are restaurants that pride themselves on offering large portions. It’s not really a Canadian sensibility. »
Several competitors in Canada
Mme McNeish suspects these brands are interested in Canada because people are turning to cheaper products and comfort foods during an economic downturn. COVID-19 has also put a spotlight on healthy eating.
But there are already plenty of competitors that meet the needs of both.
The closest rivals to Jimmy John’s and Jersey Mike’s will likely be Subway, also an American chain, Toronto-based Mr. Sub, which is run by MTY Food Group, owner of Thai Express and Manchu Wok, as well as Firehouse Subs and Tim Hortons, which shares a parent company with Popeyes Louisiana Kitchen and Burger King.
Coffee giant Starbucks and British coffee brand Pret A Manger, which expanded into Canada through A&W, are also players in the Canadian fast-food sandwich market, although both focus on more artisanal ingredients.
Mme McNeish believes Jimmy John’s and Jersey Mike’s will have to spend a lot of money to build the necessary brand awareness because their competitors “won’t hesitate to fight back” with discounts, loyalty programs and coupons.
“These are not small brands that will lack money in the face of these promotional efforts,” she maintained.
“There will be price promotions, which could drive consumers to the brands they are loyal to and aware of, and that will not help Jimmy John’s and Jersey Mike’s achieve success. »
Big ambitions for Inspire Brands
Jimmy John’s, which also announced an international franchise agreement for Latin America on Wednesday, has not yet said where its first location will be or how many stores it hopes to open.
“We will not announce this number publicly, but […] we’re approaching 3,000 in the United States and we have tremendous room for growth, so you could easily do that and more in Canada over a long period of time,” said Michael Haley, president and international general manager of the parent company of Jimmy John, Inspire Brands.
Inspire Brands, which is also behind Arby’s, Baskin-Robbins, Buffalo Wild Wings, Dunkin’ and Sonic, will tap Canadian franchiser Foodtastic to launch Jimmy John’s in Canada.
Foodtastic has more than 1,100 restaurants under brands such as Milestones, Freshii and Quesada.
Asked what the Canadian menu at Jimmy John’s will look like, Mr. Haley replied: “You want to be able to go to a Jimmy John’s in Canada and feel like you’re in a Jimmy John’s.” »
“But we also want to make sure that we make the necessary changes to resonate with the Canadian consumer,” he said.
Jimmy John’s research found that more than 60% of Canadian consumers prefer a hot sandwich. The chain will therefore offer the possibility of grilling a sandwich.
“There are just little adjustments, sometimes even the name of the sandwich can be adjusted to resonate and just have a better translation,” Mr. Haley said.
Inspire Brands will monitor the expansion closely. Some of its other banners, including the hamburger and fries giant Sonic, are not yet established in Canada.
“We find that many, if not most, of our brands can resonate in Canada,” said Haley.
“Stay on the lookout for Sonic. I think this will be our sixth brand to come out of the US and we’re not too far away from thinking today about what the international adaptation of the brand might look like. »