Shake Shack is planning to become more of a globe-trotting brand.
The New York-based fast-casual chain on Tuesday announced a licensing deal that will bring Shake Shack to Panama for the first time, with 12 restaurants scheduled to open there by 2035. The deal is with Grupo Attie-Multifood Enterprises, a Panama-based conglomerate that has a number of business operations across Latin America, including real estate, retail, online entertainment and gaming.
The group operates Olive Garden and Maison Kayser in the region, for example. The first of the group’s Shake Shack locations is scheduled to open in Panama next year, and it will be the brand’s first step into Central America.
Earlier this year Shake Shack CEO Rob Lynch set a goal of reaching 1,500 company-owned units, essentially quadrupling the chain’s footprint. The international growth, however, which is entirely licensed, is not included in that goal.
Shake Shack ended the first quarter with 589 units, of which 380 are in the U.S. and more than 210 are international, in London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul and elsewhere.
Shake Shack started early with international expansion. When the chain had only 10 locations domestically, the company signed on with Alshaya Group to open in Dubai.
Michael Kark, Shake Shack’s president of global licensing, said the company looks first at finding the right partner before deciding on a move into a new international market.
“The way that we’ve really approached it is just about finding the right partner and then setting them up with the proper resources to be able to have great success,” he said. “I always think of there as being a bit of a spectrum, from folks who license their brand and probably don’t visit very often, to groups that are very, very involved. And we’re probably on the right side of that spectrum, being quite involved.”
This year, Shake Shack expects 35 to 40 licensed units to open, as well as 45 to 50 company-owned locations, but some of those are airport and nontraditional units in the U.S.
Like most brands, Shake Shack faced headwinds in the first quarter with traffic down 4.6%, though Lynch sees the challenges as largely temporary. With the growth planned, the company is working on improving various formats and speeding drive-thru service.
Fueling the next stage of growth, the chain also last week announced the location of its second U.S. Support Center, which will open at The Battery Atlanta later this year. This new support center will join the original location in New York, as well as the international support center in Hong Kong.
Across from Truist Park, where the Atlanta Braves play, the Atlanta support center will include a Shake Shack restaurant that will be the first domestic unit to have a full bar, as well as a state-of-the-art test kitchen. (A few airport locations have bars, as do some international units.)
Already open nearby, the chain now operates a Kitchen Innovation Lab to test equipment and kitchen layouts.
Kark said the innovation lab has moveable walls so the company can test operations in various formats, which offers great insight for licensing partners, since international units tend to have smaller footprints.
“The innovation lab allows us to make smarter, better decisions on how to fit into different formats, both domestic and abroad,” he said.
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