BWLD Buffalo Wild Wings, Inc. (delisted)

Scottsdale, Arizona-based P.F. Chang's China Bistro, Inc (PFCB), which owns and operates two restaurant concepts P.F. Chang’s China Bistro (Bistro) and Pei Wei Asian Diner (Pei Wei), recently inked a deal with Interaction Asian Restaurants L.P to expand to Canada. Interaction Asian is headed by Michael Aronovici, who holds a key position in other restaurant companies in Canada.

As per the agreement, P.F Chang’s is expected to open Bistro restaurants in the eight Canadian provinces namely Nova Scotia, Prince Edward Island, Ontario, Quebec, Manitoba, New Brunswick, and Newfoundland. The first restaurant will come up in 2012. 

The company believes that the Canadian market offers great growth opportunities as Canadians are appreciative of high quality food and will love P.F. Chang's Asian cuisine. We believe that its recent partnership with Interaction Asian will enhance its market share in the Canadian market going forward.

P.F. Chang's is expanding its brand in the international market through licensing agreements as it reduces the company’s capital intensity. Moreover, under the license agreements, the company is entitled to receive an initial territory fee, store opening fees and ongoing royalty revenues based on a percentage of international restaurant sales.

During fiscal 2010 and 2009, the company signed four licensing agreements to open Bistro restaurants in international markets. In 2011, P.F. Chang's, through its various partnerships, intends to open seven to ten new Bistro restaurants in international markets. In 2011, the company expects to open three to five new Bistro restaurants and six to eight new Pei Wei restaurants.

One of its competitors Buffalo Wild Wings Inc(BWLD) is also increasing its footprint in Canada. The company plans to open more than 50 company-owned and franchised restaurants in the next 5 years.

P.F Chang’s holds a Zacks #3 Rank, implying a short-term Hold rating on the stock. We also reiterate our long-term Neutral recommendation.

 
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