Cheesecake Factory to Debut in East Asia - Analyst Blog

The Cheesecake Factory Incorporated CAKE entered into an exclusive licensing agreement with Hong Kong-based Maxim's Caterers Limited to build and operate Cheesecake-branded restaurants in Asia. Per the deal, at least 14 restaurants will be developed over the next decade in Hong Kong, Macau, Taiwan and China. The agreement also allows unit openings in Japan, South Korea, Malaysia, Singapore and Thailand. The first restaurant is expected to be opened in fiscal 2015.  

Established in 1956, Maxim's Caterers, operates under Hong Kong Maxim's Group, and is primarily a Food & Beverage company comprising Chinese, Asian and European restaurants, quick service restaurants, bakery shops and institutional catering.  

Cheesecake Factory is looking to cash in on Maxims' expertise in successfully operating Starbucks Corporation's SBUX restaurants in Hong Kong, Macau and Vietnam markets. However, partnering with Maxim's internationally is a major shift for California-based company's strategy which owns and operates restaurants in the U.S. and has franchises internationally.

The deal marks Cheesecake Factory's entry into East Asia which is also its third international market. In 2012, the restaurateur forayed in Dubai and is set to debut in Guadalajara, Mexico in July, beginning its Latin American journey.

East Asia has, in the recent times, become one of the world's few bright spots for economic growth and healthy investment returns. Boasting a relatively younger population and growing middle class with comparatively higher disposable income, East Asia has become the target of several companies, including Cheesecake Factory, that are striving to gain market share in the growing economy.

Cheesecake currently has a Zacks Rank #4 (Sell). Better-ranked stocks include Burger King Worldwide, Inc. BKW and Fiesta Restaurant Group, Inc. FRGI, which have a Zacks Rank #2 (Buy).