Franchises Compete for International Executives




Bloomberg reports that restaurant chains like Domino’s Pizza, Dunkin’ Brands and KFC are looking at expanding their businesses overseas, especially in China where restaurant sales have risen significantly.  Restaurant companies have been experiencing declined sales in the past two years here in the U.S. and are now looking outside of the US for more sales.  This move has driven these businesses to seek executives who know and understand the local climate, particularly in tax laws and regulations.

Domino’s Pizza Inc. (DPZ) can get a pizza to your house in less than 30 minutes. It took the company six months to find the right person to lead its international expansion.

Restaurant chains including Domino’s, AFC Enterprises Inc. (AFCE) and Dunkin’ Brands Group Inc. are hunting for executives who can adapt menus to international tastes and navigate foreign regulations. Such changes may accelerate as chains expand overseas amid slowing U.S. growth, said Guy Cote, who leads restaurant-executive searches for Heidrick & Struggles International Inc. (HSII) in Miami.

“We’re twice as busy as we were 18 months ago, and there’s a war for talent right now,” Cote said in an interview.

U.S. restaurant sales declined 2.8 percent in the two years through 2010, while sales at dining establishments in China jumped 46 percent in the same time, data from researchers Technomic Inc. and IBISWorld Inc. show.

Demand for talented executives is so high that Domino’s had to go outside the restaurant industry for its newest international executive, former Bain Capital LLC partner Richard Allison. The pizza chain searched for six months and closed the deal during a Valentine’s Day dinner at The Chop House restaurant in Ann Arbor, Michigan, where the company is based, Chief Executive Officer Patrick Doyle said in an interview.

Allison, 44, will help the chain, which has more than 4,500 stores outside the U.S., open as many as 300 stores annually, with most being overseas, Doyle said.

“In 2012, we will reach the point where we have more stores and more sales outside the U.S. than inside,” Doyle said. The company is seeking additional executives to build out its international team, he said.

“If you look around the world, KFC has pretty much had it to themselves” for 20 years, Skehan said in an interview.

Introducing a brand to a new country is difficult, which is why Dunkin’s Baskin-Robbins chain has sought executives with marketing experience for its international team this year, said Cote, the recruiter for Chicago-based Heidrick & Struggles.

The world’s largest ice cream brand hired Paul Reynish, CEO of a Subway unit that handled advertising outside the U.S., January and promoted him to chief marketing officer of Dunkin’ Brands international last week. Reynish had previous marketing jobs with Burger King Holdings Inc. in Asia, the U.K. and Ireland.

Competition for international executives is fierce as many restaurants don’t have programs to train employees to lead overseas. While Domino’s ha