After announcing late last year its renewed franchise push in the United States, Pret A Manger is entering into a joint venture partnership with franchisee Dallas International to take over operational control of 52 stores in New York, Pennsylvania and Washington, D.C.
With the formation of Empire JointStar, Dallas International will acquire majority ownership of Pret’s corporate-owned locations while the company retains a minority stake. The transaction is expected to close in February. It does not involve existing franchised shops in New York, Pennsylvania and D.C.
The deal is an evolution of London-based Pret’s relationship with Dallas. An existing franchisee with eight shops in the United Kingdom, Dallas is also set to develop 40 locations of the sandwich and organic coffee chain in California through a separate franchise agreement. Under the joint venture, Dallas will also have exclusive rights to open new stores in the three markets where it’s assuming control.
“We think there’s wide appeal that Pret brings to its customers,” said Shane Thakrar, president and CEO of Dallas International. “We see great potential to grow on both coasts,” and he noted the performance of his group’s U.K. locations, along with improving sales in the U.S., “gives us great confidence.”
Shane Thakrar leads Dallas International, which through the formation of Empire JointStar is assuming operations of more than 50 Pret shops in the U.S.
Pret reported recent U.S. shop sales are up 10 percent in U.S., and Thakrar’s group in August opened a new store in New York City’s Hudson Yards development that he said has “blown all of our projections.” The group is preparing to open its first California location, in the Westwood neighborhood of Los Angeles, in January, with three more on tap for the first half of 2024. It also has six more U.K. units in development and is designing its—and the brand’s—first drive-thru shop.
Pret has more than 600 locations in the United Kingdom and other international markets, but its U.S. store count is about half of what it was in 2019. JAB Holding Co., the Luxembourg-based conglomerate that also owns Panera Brands and Krispy Kreme, acquired Pret in 2018. With most of its U.S. stores in urban areas—including a high concentration in New York City–that relied heavily on office workers and commuter traffic, Pret was especially challenged during the COVID-19 pandemic as downtown commercial areas emptied. It pulled out of the Boston and Chicago markets in July 2020, closing 17 units; it also shuttered 30 U.K. shops at that time.
Jorrie Bruffett, president of Pret A Manger U.S., said the company is preparing to soon reopen the Chicago market and again build out that territory. It’s also targeting Texas, Florida and Washington state for corporate and franchise development. The joint venture with Dallas International, she said, “frees us up to think about how else we can grow the brand.”
Jorrie Bruffett is president of Pret A Manger U.S.
Pret found success with this approach previously in the U.K., she added, when it divested ownership of three company locations, also to Dallas.
“Shane and his company have been a great partner already,” said Bruffett, who joined Pret in 2018 after more than 10 years at Panera Bread.
Pret unveiled a new U.S. brand identity in 2021, starting with the redesign of a store in Manhattan. The changes created a designated area for Pret Pick Up, incorporated a modernized look and feel, and factored in Pret’s coffee subscription program, now called Club Pret. Subscribers pay a monthly fee of $40 to order their favorite Pret drinks up to five times a day and get 20 percent off the entire menu.
Dallas International, said Thakrar, plans to remodel a number of shops to the most recent look and feel, similar to its Hudson Yards location.
Pret A Manger aims to also continue expanding in Canada, where last year it signed a deal with A&W Canada and now has eight shops. Elsewhere on the international front, franchisee Carebrook Partnership plans to open 20 locations in the Republic of Ireland and Northern Ireland over the next 10 years. Carebrook, led by majority co-owner Gerard Loughran, is a longtime Pret franchisee with multiple stores in London.