The Montreal restaurant community rushed to the Queen City at the start of 2022 and it could increase its footprint in the years to come. Six chains — Boustan, Spice Bros, Mandy’s, Sushi Sama, Seau de crabe and Café Dispatch — opened their first branches across Toronto last year. Some have not been able to overcome the challenge of establishing themselves in the largest city in the country, but several chains are planning to expand.
Karan Bhatti, the co-founder and owner of Spice Bros, says about 50 entrepreneurs wanted an Ontario franchise of his Indian fast-food chain. The first Toronto sign was finally put up in January 2022 in the Etobicoke neighborhood, west of downtown. Sales started slowly, but the restaurant is gaining popularity. The chain is already planning to open a new location in Mississauga.
Popular Lebanese food chain Boustan opened its first Toronto branch in January 2022 in Scarborough, a neighborhood east of downtown. A second – also in the suburbs – welcomed its first customers a few months later. “It allows us to test the market and it’s less expensive,” explains marketing director Joseph Audi. “Both restaurants are doing well,” he continues. Two more will open in the Greater Toronto Area in 2023.
However, not all Montreal chains can consider themselves so lucky. Sushi Sama — which has 34 restaurants in Quebec — embarked on the Toronto adventure in February 2022. The Toronto branch, located on rue de l’Avenue, finally abruptly closed down less than a year more late. His experience highlights the difficulty of conquering the Queen City market for Quebec catering companies.
A ruthless market
“A significant number of Montreal restaurants have come here and failed spectacularly,” noted restaurant consultant Douglas Fisher. The challenges are financial and cultural. First, land for rent is more expensive and property taxes are higher in Toronto than in Montreal. Second, Torontonians have different habits and lifestyles from those of their Quebec neighbors, according to the consultant. “Montrealers like to sit in a café to chat. Torontonians do things quickly,” he says.
It allows us to test the market and it is less expensive
Douglas Fisher recommends companies have an employee on the ground, in the region they are looking to break into. An employee, he says, who understands the market. Some chains make the mistake of running their business from their hometown, according to the consultant.
“That was the problem with Moishe’s and Dunn’s,” he says of the two well-known restaurants in Montreal, which didn’t last long in Toronto. “They didn’t understand the Toronto market,” says Douglas Fisher.
“Toronto is much more like New York than Montreal,” said Karan Bhatti after a year in the Queen City. “In Montreal, the food and the style…everything is different,” he adds. The Quebecer had to adapt his marketing campaigns to the Toronto clientele, an experience that allowed him to understand why certain American chains choose to establish themselves in Toronto before coming to Quebec. “It’s the language,” he explains. If you translate a French-language campaign into English, it looks like a dubbed show. »
The risk of teleworking
His Toronto restaurant is doing well today, but Spice Bros nonetheless swam in troubled waters upon his arrival. The fast food counter faces three mostly empty office towers. “Restaurants on the street complain that dinner time is quiet,” says Karan Bhatti. “We had bet on the fact that the towers would fill up,” he explains. The co-founder also chose the location because the surrounding clientele reminded him of Dollard-des-Ormeaux, where Spice Bros opened its first restaurant.
Chrissy Durcak, the owner of the Dispatch cafe, was able to somehow take advantage of the situation. In January 2022, Dispatch Café opened its first counter in Toronto. The Montrealer negotiated her rent with an owner who was “really flexible and open to negotiations”, since the financial district – where the Toronto stopover is located – had been deserted due to telecommuting. The previous tenant was a cafe that went bankrupt during COVID-19. “It was a bit of a turnkey move,” she says.
The cafe also benefited from the fact that many Torontonians were already familiar with the brand. Indeed, 50% of Dispatch’s sales are made online (the company delivers grain), and Toronto is the largest customer base after Montreal. “We already have an active clientele,” says Chrissy Durcak. She would like to open new cafes in Toronto. “It’s the biggest city in the country, so it’s a logical next step for our growth,” she says.
This story is supported by the Local Journalism Initiative, funded by the Government of Canada.