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A year after massive expansion plan, Smoke's ambitions may prove daunting

TORONTO – Smoke’s Brands, most famous for its Smoke’s Poutinerie restaurants, announced a highly ambitious plan a year ago to diversify into other greasy goodness and open 1,300 outlets by 2020.

The task may be daunting.

Since the Ontario-based company announced plans to have 1,300 restaurants operating by 2020, it has 81 open, 39 of which have set up shop in the past year.

“I’ve been claiming global domination since I opened up that first one … and nobody believed me,” Ryan Smolkin, founder and CEO of Smoke’s, said in an interview.

Smolkin says he remains on track to expand to western Europe, the Middle East, Australia and the Asia-Pacific region, adding that he has hit every expansion target since the company’s launch in November 2008.

One of the only ways to accomplish such a bold expansion is through master franchise or licence agreements, said Ann Stone, a lecturer at the University of British Columbia’s Sauder School of Business and former chief marketing officer at several U.S.-based franchised organizations.

Under such agreements, a master franchiser buys rights to develop a geographic area and can then sub-license Smoke’s locations to other franchisees. It’s a very popular model in the Middle East, said Stone.

Smoke’s, in fact, plans to ink those types of agreements for its 150-store overseas expansion, said Smolkin, with the Middle East or the U.K. likely to be first in line.

But master franchise agreements aren’t very popular in the U.S., Stone says, where the bulk of the company’s growth is meant to happen.

Hundreds of stores in the U.S., therefore, will be “very challenging” for Smoke’s, Stone said.

“I’d say their chances are small.”

Smolkin hopes to grow from five restaurants to 800 in America. The company says it won’t offer master franchising opportunities in the U.S., but rather multi-unit agreements where one franchisee or more open numerous outlets.

The company has already sold dozens of units to American franchisees with locations going into development. In Michigan, for example, a group of franchisees will open 10 stores over the next three years, Smolkin said.

But the deals can take time to turn into reality. Thirty-three such agreements that existed in June 2015 have yet to materialize into bricks-and-mortar outlets.

That’s not uncommon because the company is strategic about real estate location, said a spokesperson for Smoke’s.

Many of the new stores would be in non-traditional venues. Smolkin plans to open 725 poutineries at college and university campuses, sports venues, airports and casinos around the world.

In Canada, 18 of Smoke’s 67 poutineries are on post-secondary school campuses, with 31 more set to open before the fall semester.

“We’re the heartbeat of the college and university world here in Canada,” he said.

As he expands his poutineries, though, Smolkin faces more competition from other chains.

Toronto-based Poutini’s House of Poutine recently opened its second location in the city. And Poutineville, which sells poutine and other food, now has four Quebec shops and one in Ontario.

Even big-name, fast-food chains have started selling the beloved Quebec concoction of french fries, gravy and cheese curds.

In 2013, McDonald’s launched poutine nationwide. It was previously only available in its Quebec restaurants. Wendy’s, Burger King, A&W and New York Fries also serve it.

Smolkin, though, isn’t worried about others invading his turf.

The fast-food chains and their multimillion-dollar advertising budgets are simply helping to make the dish more mainstream, and bringing him new customers, he said.

As the number of Smoke’s restaurants grows, so does the menu.

Smolkin has expanded beyond poutine by opening four “burritories” and five “wieneries” over the past year. Both chains stay true to Smoke’s vision by serving up audacious concoctions like spaghetti-and-meatball burritos, and peanut butter, jelly and bacon hot dogs.

One “burritorie” just started selling tacos and the rest are scheduled to follow suit. And Smolkin hints more additions are coming.

“There may be something like a quesadilla,” he said. “You never know.”

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