The Freshii Business
Freshii Inc., the Toronto based healthy restaurant chain, reached 6.3 per cent in its trading initialisation, after mounting C$125.4 million in its initial public offerings (Alexander, 2017). The brand is recognised for serving fresh food designed to energise modern life busy bees. Freshii satisfies every taste and dietary preference with its diverse and completely customizable menu for breakfast, soups, salads, wraps, bowls, burritos, frozen yogurt, juices and smoothies served in an ecological-aware manner.
Since its foundation in 2005, Freshii has established hundreds of restaurants in variety of cities and countries across the globe. The firm’s principal mission is to help people live healthier and enhance lives by providing healthy food conveniently and reasonably. Freshii top management strongly states that the firm has to be at the leading position of global health and wellness initiative; so as to keep discovering new healthy fast food categories (Freshii, 2017). Freshii restaurants are located extensively from cities, campuses, rural neighbourhoods and shopping malls to fitness clubs and small towns.
The firm’s corporate goal is to bring healthy food to the general public with wide availability and reasonable pricing. Freshii varied menu continues to progress by the firm’s leading chefs and certified nutritionists, and satisfies a wide range of dietary and living styles. Hence Freshii menu now also includes salads, bowls, burritos, wraps, soups, juices, smoothies and frozen yogurt, all of which can be customized with flavourful combinations from a wide variety of high-quality and colourful ingredients (Freshii, 2017). In addition to healthy meals, its extensive menu offers snacks that vitalise its bustling consumers throughout the day. This menu is also complemented by seasonal and creative offerings.
Freshii is aiming to rise the store count by 150 to 160 net new franchised restaurants to reach 430 to 440 system-wide restaurants by the end of fiscal 2017; and are aiming at 810 and 840 stores by the end of fiscal 2019 (Remiorz, 2017). Freshii growth ambition reflects their commitment to expand the distribution network, as shown by its ability to appeal high-quality franchise partners and employ a comprehensive selection process.
Foodservice Market and Freshii Adaptation
Consumer foodservice in Canada continued to record steady growth in 2016. The industry’s performance was in accordance with the fragile economic climate in Canada. Sales profited from busy consumer routines and a strong materialism trend (Euromonitor International, 2017). In fact, Canadian food service industry creates $75 billion in annual sales, demonstrating about 4 per cent of the national gross domestic product. Canada’s food service industry encompasses both commercial sector and non-commercial sector, including restaurants, bars, caterers, hospitals and hotels. Consumer foodservice continues to profit from the initiation of new healthy ingredients and flavours as well. However, industry’s growth was limited to a certain extent by increasing economic concerns, a weak Canadian dollar and a high debt-to-income ratio for many consumers.
Cumulative rivalry in the industry drove less profitable businesses out of the game. Consumer foodservice’s growth in 2016 was mainly dominated by restaurant chains; as many independent entrepreneurs observing an inclusive sales stagnate as they fought black and blue to survive (Johnson, 2016). Franchise corporations take advantage of their superior economies of scale, which are enabling them to meet consumer demand for healthier and eco-friendlier meals without significant increases in price. However, there were some niches in which independent entrepreneurs outperform giant food chains. Medium and small outlets can easily enhance food and service quality, healthier ingredients so as to appeal the demanding consumer. They are also often favoured by millennial generation thanks to their superior individuality, authenticity and good service.
A mixture of factors is expected to enhance Canadian consumer foodservice industry’s slight growth over 2016 – 2021 periods. As the economy is predicted to continue to grow over the short term, which resulted in higher employment rate, the public is expected will likely spend more money on eating out (Birak, 2017). Furthermore, as cities expansion rate continues and urban living styles become busier, Canadians will likely spend less time cooking their own meals, instead choosing the convenience offered by foodservice industry. Demand for convenience will also be reinforced by the further implementation of online ordering and handy digital payment platforms. Growth is probably to be connected to materialism trend. Consumers are expected to become eager to pay more for premium-quality, healthy and organic ingredients. However, rising nutrition costs will remain a significant issue for the foodservice industry to find a proper solution.
The Fast Casual Restaurant categories are subject to shifts in consumer trends, preferences and consumer spending, which can affect Freshii revenue and operating results unpleasantly. As a result, Freshii recognised track record to adapt to changes to oscillations in consumer landscape is key to their future success (Freshii, 2017). The diverse product types provide Freshii with the ability to optimize its sales combination in a flexible way. In order to ensure the firm can adapt to changing market conditions, Freshii top management have an operational model that allows them to wisely change its menu in accordance with consumers’ preferences.
A Promising Future for Freshii
Canada’s economy is firing on all cylinders in 2017 and is expected to lead the G7 countries with real GDP growth of 2.6%. The forecast for 2017 is a significant upgrade from last year’s forecast, which called for 2.1% growth (Euromonitor International, 2017). Economic activity is being driven by strong consumer expenditure and a booming real estate market. And accordingly Freshii aims to open 150 to 160 new franchise stores in fiscal year 2017 and expects annual same-store sales growth of 3 per cent to 4 per cent through fiscal year 2019, according to a January 25 regulatory filing.
Commercial foodservice sales are projected to grow by a solid 4.9% in 2017. Combined with the non-commercial foodservice industry, total industry revenues will exceed the $84 billion mark (Gibillini, 2017). Due to vigorous demand in British Columbia, Ontario and Quebec, full-service restaurants will spearhead all segments with a 5.5% increase in sales in 2017. Sales at quick-service restaurants are expected to grow by a solid 5.3% in 2017 following several years of considerable surges.
Furthermore, healthier food is not just a trend, but a movement. And that shift is spilling over into the fast food market too, forcing legacy chains to try maintaining their position (Luciani, 2017). Within the last few years, many Canadian consumers have explicitly expressed a growing interest in healthier fast food that incorporates more low-calorie ingredients and freshly produce while remaining convenient and reasonable. This solid foundation has made Freshii confident to challenge the fast food giant McDonalds. Despite the lesser funding, Freshii’s comparable sales growth is beating all publicly-traded rivals.