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Asian Box .jpg Photo courtesy of Asian Box
Asian Box is going to start franchising this year for the first time in company history.

How Asian Box is ‘starting over’ after more than 10 years

The restaurant has started to embrace nontraditional locations and is preparing to launch a franchising program for the first time in company history.

Asian Box opened its first location in March 2012 and is now up to nine locations – a slow and steady pace to be sure, and one filled with “many ups and downs,” as CEO Chuck Imerson describes.

Those downs include the pandemic, of course, but also some bad locations that led to a couple of closures.

“We’ve had to recover just like anyone else, and I look at it as getting a little start-over. We had a couple of real estate decisions that were not favorable and hurt our overall financial structure. I think for us, we were fortunate to get out of some leases and just sort of start over again,” Imerson said during a recent interview. “We now have a financial model in place that’s more attractive.”

Like many operators, Imerson said the company has gotten smarter in recent years out of necessity. The company is exploring nontraditional locations, for example, including a new spot at the Asian Art Museum in San Francisco, as well as a location at the San Francisco International Airport. The company also has partnerships inside of food halls, which is “giving us a good test market experience,” Imerson said.

Asian Box is also embracing catering and events, menu innovation such as boba tea and gluten-free bread (which took nine years to perfect), and technology solutions like kiosks.

Asian Box’s “start-over” also includes a franchising program to be launched this year for the first time in company history. Despite the new program, however, Imerson wants to keep that slow and steady pace, while also simultaneously adding “one or two” company-owned stores each year.

“From late 2016 to the middle of 2020, we opened seven stores and for us, we learned that was probably too fast,” he said. “I would love to sign one franchisee and then two or three coming down the pike. We’re not going to bite off more than we can chew again. We want to make sure we’re at a pace where we can properly support the franchisees. We’re not in any hurry.”

That said, he believes there is a ton of opportunity because there simply aren’t a lot of competitors in the Vietnamese scratch-kitchen space, unlike the chicken/pizza/burger categories. He said the concept’s opportunity extends all over the country – well beyond its home market of California.

“And we have the flexibility with our footprint now. Our airport location is our second busiest store and it’s going to cost less to build those types of locations out,” Imerson said. “So, we’ve learned a lot over the past 10 to 12 years and we’re excited to start sharing that with franchisees.”

The timing might be right for reasons other than the company “becoming smarter;” it also happens to fit a confluence of trends currently having a moment. For instance, Southeast Asian cuisine was identified as a top global trend in the National Restaurant Association’s 2023 What’s Hot Culinary Forecast. Further, about 25% of Americans now follow a gluten-free diet. There’s also the sustainability angle; Asian Box considers itself to be one of the first sustainable restaurant brands, with its “farm to box” locally-sourced business model. The majority of Gen Z consumers prefer sustainable brands and are willing to spend 10% more on such products.

These attributes have helped Asian Box recover some of its business from the pandemic, though there are still sluggish dayparts, such as lunch on Fridays. And, catering was about 20% of the business in 2019 and is now about 10-to-12%.

“We’re still not there, but we’re getting there,” Imerson said. “We feel good about the progress we’ve made.”

Where Imerson thinks Asian Box is especially well positioned is with its labor pool. He said, for example, every manager has been with the system for at least four years. After the pandemic, the company started accepting tips, which has helped with that retention.

Another initiative he thinks will help the concept continue its recovery is a more aggressive approach to local marketing.

“We’re actually going back to old school guerilla marketing at the store level because we see so much competition for search engine, digital marketing and we’re spending all of this money for the same real estate on those search engines,” he said. “We’re trying to stay with the times on digital and social media, but at the same time, we’re doing things like sponsoring the local schools. Those are the top-of-mind things for the people in our communities.”

The slow and steady “start-over” phase is expected to last at least three more years. After that, Imerson said the company can “maybe” look at going to the next level.

“We came out of the pandemic in some ways stronger and more efficient,” he said. “We’ve been very fortunate with overall staffing and to have had the opportunities to learn from things and in some ways start from scratch and that’s what it feels like we’re doing now. We’re not in a race.”

Contact Alicia Kelso at [email protected]

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