Le Duff America Ignores the Slow Recovery

Development chief details chain growth
Paul Carolan, chief development officer, Le Duff America

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Chain Store Age asked Paul Carolan, chief development officer for Dallas-based Le Duff America, about the bakery-café company's aggressive growth plan in the United States.

The North American subsidiary of Paris-based Groupe Le Duff SA, Le Duff America now manages four brands in the United States: Bruegger's Bagels, la Madeleine Country French Café, Brioche Dorée and Mimi's Café, which was acquired in March.

This year, the 300-unit Bruegger's will add eight to 10 franchises and seven corporate units. With just over 60 units, la Madeleine will open seven corporate restaurants, one franchise and three licensed units. Brioche Dorée is adding two units to its existing U.S. roster of 33 units. Mimi's is getting prepped for growth.

Seems brave in this economy.

How can you have confidence in such aggressive expansion plans in this economy?

Many restaurants are battling economic headwinds. We don't feel those headwinds. We really don't discuss the economy. We talk about food, customers and site selection. As a privately held company, we can take a long-term view of development. Public brands must focus on shorter-term development strategies. Of course, we have headwinds of our own.

What headwinds?

We face two major challenges: finding franchisees and sites. Franchisees must be great restaurateurs and capitalized well enough to build at least five units. For instance, a la Madeleine costs $1.2 million to build out, an investment that typically produces an annual unit volume of $2.1 million.

Our biggest challenge is site selection. All of our brands have specific siting needs. Bruegger's Bagels, for instance, needs a 2,000-sq.-ft. to 2,400-sq.-ft. endcap space, great co-tenancy and visibility. We look for these sites in areas with dense retail. Of course, it has to be in a center that is close to Bruegger's customers.

Describe your customers.

All of our brands focus on customers with similar demographics and psychographics. Our customers are 25 to 44 years old, well educated and highly compensated. The bakery café segment has a strong lunch business. So we need sites in communities with high daytime populations. That's another site selection challenge.

Doesn't la Madeleine have strong breakfasts and dinners, as well as lunch?

Yes, our breakfasts and dinners are strong. Our menu is deeper than most bakery-cafés. We bake breads and make sandwiches, but we also offer plated French specialties, such as Chicken la Madeleine.

What are you doing that's new?

Brioche Dorée has developed a prototype for street-front units in North America. Traditionally, Brioche has gone into non-traditional locations in hospitals, airports and hotels. Now, we're taking to the streets.

What about Mimi's strategy?

Strategy development goes to Le Duff's core and applies to all of our brands. We're all about the food. We invite you into our home, talk with you about the food and your choices, and take pleasure in serving you. And we want you to come back. We're working through these ideas from Mimi's point of view.