UK-based Pret A Manger is seeking to open at least 40 stores in Israel over the next decade in partnership with domestic franchise partners Fox Group and Yarzin Sella Group
Pret A Manger has reached an initial agreement with Israeli retailer Fox Group and restaurant operator Yarzin Sella Group to launch in Israel.
In a press release, Pret said the agreement, set to be formally signed in the first quarter of 2023, will see a jointly owned company established in which Fox Group will hold 75% and Yarzin Sella Group 25%.
According to Israeli media, the 10-year franchise agreement is conditional on the two businesses opening at least 40 Pret A Manger stores over the next decade.
Fox Group and Yarzin Sella Group will then have an option to extend the arrangement for a further 10 years subject to meeting certain unspecified conditions and milestones.
The move is part of Pret A Manger’s plan to double the size of its business within the next five years, including launching in five new markets by the end of 2023. The company currently has more than 600 stores globally.
“We are still in the early stages but are delighted to have reached an initial agreement to bring Pret’s freshly made food and organic coffee to customers in Israel. Over the past year we have stepped up our international expansion and growth plans, working with our franchise partners to introduce Pret to new markets. We’re looking forward to seeing how consumers in Israel respond to the great taste and innovation from Pret and hope we are a welcome addition to the food-to-go market for all,” said Pano Christou, CEO, Pret A Manger.
Fox Group operates over 1,000 stores across 23 predominantly fashion retail brands. The Pret A Manger agreement represents the company’s first foray into the food industry.
“The signing of MOU with the Pret A Manger chain and the Yarzin-Sella group for the establishment of the Pret A Manger chain in Israel is a significant step toward increasing competition, value, and variety for the benefit of Israeli consumers. Israeli consumers will benefit from an international brand and a variety of products that they love and look every time they visit Europe or the US, here in Israel, all over the country,” said Harel Wiesel, CEO, Fox Group.
Yarzin Sella Group currently operates 30 concept restaurants across Israel.
“We at Yarzin-Sella are eager to promote innovation in cafés and Grab & Go in the Israeli market at the highest level. We are particularly excited about our partnership with the Fox Group and the added value that both entities will bring to the Israeli market,” added Yuval Sela, CEO, Yarzin Sella Group.
Last year Pret A Manger opened its first stores in Canada, India, Ireland and Kuwait. The company also plans to launch in Spain and Portugal this year.
In November 2022 it was reported that the UK coffee and food-to-go chain was considering launching in Israel via Poalim Equity, the investment division of Israel’s Bank Hapoalim.
Israel’s domestic-led branded café market has historically proven challenging for international brands to navigate. Germany’s Café Landwer and US-based McCafé are among the only international coffee chains to achieve significant success in Israel, with the former brand holding a 5% total market share.
Only one international coffee chain has entered Israel in the last 12 months – Italy’s Filicori Zecchini.
Underlining a challenging environment for international café chains, Starbucks closed its six stores in the country in 2003 after less than three years of operations, citing going operational challenges, and has yet to return.
World Coffee Portal data shows Israel’s branded coffee shop market exceeds 1,300 outlets and declined by net five stores in 2022.
