Buffalo Wild Wings begins Canada push

TORONTO Mon May 16, 2011 5:01pm EDT

TORONTO (Reuters) - Buffalo Wild Wings Inc (BWLD.O) expects to generate annual sales of $150 million in Canada in five years as it makes its first foray outside the United States, its top executive said on Monday.

The U.S. sports bar chain, known for its namesake spicy Buffalo-style chicken wings, is at the start of an international expansion drive in which it also plans to set up shop in Britain and the Middle East, Chief Executive Sally Smith told Reuters in an interview.

The company, which opened its first Canadian restaurant in Oshawa, Ontario, on Monday, will open 50 restaurants in the country in five years, and eventually there will be 100 to 150 of them, Smith said.

"Canada has a lot of the elements that we look for: You've got large cities, dense demographics, love of sports," said Smith, who handed out some of the first chicken wings to customers at the Oshawa opening.

The company plans to have four restaurants up and running in Ontario by the end of the year -- the others being in Guelph, Mississauga and Newmarket -- and will open 10 in the Greater Toronto Area by the end of 2012, Smith said.

Elsewhere in Canada, it is looking at the cities of Calgary and Edmonton in Alberta, as well as Vancouver and the province of Quebec, said Smith, who took the helm of the company 15 years ago.

Canada has marginally higher real estate and food raw material costs than the United States, but profitability should be similar to U.S. levels, she said.

She projects the Canadian restaurants will be profitable in less than a year, said the costs of the expansion have been factored into the company's annual outlook.

The company is also involved a legal fight with Aurora, Ontario-based restaurant chain Wild Wing, which offers similar fare, over the right to use the "Wild Wings" name in Canada.

"We believe we have the right to use the name and trademarks," Smith said. "There's room for many companies to coexist in Canada."

UK AND BEYOND

The next move for Buffalo Wild Wings will be to take its chicken wings outside of North America.

"We're looking at the United Kingdom. We're looking at the Middle East. We have some very strong interest from potential franchises."

The company plans to enter Britain in 18 to 24 months and has been doing the groundwork for about a year, Smith said.

She sees the British expansion taking place at a slightly slower rate than in Canada, but said the market can handle about 100 of its restaurants, which also offer hamburgers, salads, chicken sandwiches and flatbreads.

Since the first Buffalo Wild Wings restaurant opened on the Ohio State University campus in 1982, the Minneapolis, Minnesota-based chain has expanded to more than 750 locations across 45 U.S. states.

(Reporting by S. John Tilak; editing by Peter Galloway)

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