Florida-based Darden Restaurants Inc. (DRI) recently announced that it has inked a development agreement with food service franchise operator, Americana Group of Kuwait to enter the Middle East market. Americana Group will develop and operate all three of Darden’s brands Red Lobster, Olive Garden and LongHorn Steakhouse in the Middle East. The terms of the deal were not disclosed.
As per the deal, Americana Group will set up 60 restaurants in Bahrain, Egypt, Kuwait, Lebanon, Qatar, Saudi Arabia and United Arab Emirates over the next five years.
The above mentioned deal affirms management’s intent to make Middle East one of the prime markets for Darden’s international expansion. Darden sees tremendous growth potential in Middle East where its finds a fondness for American dining brands. The company seeks to capitalize this in full.
Darden has successfully owned and operated its restaurants in the domestic market while many of its international locations are operated by franchise partners. We believe that the company is trying to spread its presence beyond the U.S. more aggressively following cut-throat competition in the rather saturated domestic casual dining market.
Americana Group is the largest food service franchise operator in the Middle East with more than 1,200 restaurants throughout the region. The company enjoys local market knowledge and has a proven track record of franchising big U.S. brands including KFC, Pizza Hut of Yum! Brands Inc. (YUM), Hardee’s, Krispy Kreme Doughnuts Inc. (KKD) and TGI Friday’s.
Apart from this new development, the company has also five franchised LongHorn Steakhouse restaurants in Puerto Rico. Additionally, it has 25 licensed locations in Japan, which existed before General Mills Inc. (GIS) spun off Darden as a separate company in 1995.
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