The Cheesecake Factory Inc. (CAKE) recently unveiled a Cheesecake Factory restaurant in Jeddah, Kingdom of Saudi Arabia under a licensing agreement with Alshaya Trading Co., W.L.L., a provider of commercial equipment for homes and offices.
Located in Le Mall, the restaurant is spread over an area of approximately 10,700 square feet and has the capacity to accommodate approximately 305 guests. Featuring the classic Cheesecake décor of attractive wall paintings and flooring, the restaurant has a varied menu comprising more than 250 handmade items including signature cheesecakes and desserts.
This is the company’s fourth international restaurant in licensing agreement with Alshaya. Together, they are already operating restaurants at The Dubai Mall and the Mall of the Emirates, both in Dubai, and The Avenues Mall in Kuwait. Cheesecake and Alshaya Trading Co. W.L.L collaborated for the very first time in Aug 2012 to open the first Cheesecake restaurant at The Dubai Mall. This was followed by the opening of an outlet at the Avenues Mall in Kuwait and another at the Mall of the Emirates in Jan 2013.
Cheesecake’s licensing agreements with Alshaya are targeted toward the development of its restaurants in United Arab Emirates, Kuwait, Bahrain, Qatar and the Kingdom of Saudi Arabia and other operating markets in the Middle East and North Africa, Russia, Turkey and Europe.
The deals affirms management’s plan to make the Middle East one of the prime destinations for international expansion owing to the increasing popularity of American dining brands in the region. However, food cost inflation remains a matter of concern.
The company presently has a short-term Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Buffalo Wild Wings Inc. (BWLD), Burger King Worldwide, Inc. (BKW) and Cracker Barrel Old Country Store, Inc. (CBRL). All these stocks carry a Zacks Rank #2 (Buy).
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