Calabasas Hills, California-based The Cheesecake Factory Inc. (CAKE) opened its largest outlet at the Mall of the Emirates in Dubai on December 31, 2012. The latest 22,800 square-feet restaurant, opened in association with the Alshaya Trading Co., W.L.L., marks the third overseas opening. The new outlet enjoys a prime location in Dubai and lies in close proximity to the Ski Dubai slope. It accommodates around 526 seats and its wide range of menu has more than 200 options.
In January 2011, the company signed an agreement with Alshaya group of companies to build and operate 22 Cheesecake Factory restaurants in five countries of the Middle East--United Arab Emirates, Kuwait, Bahrain, Qatar and the Kingdom of Saudi Arabia over the next five years. The agreement also includes expansion plans in other markets of the Middle East and North Africa, Central and Eastern Europe, Russia, and Turkey.
Under this licensing agreement, the company made its international debut with the opening of its first The Cheesecake Factory restaurant in Dubai in August 2012 and it has also opened another restaurant in The Avenues Mall in Kuwait.
The Cheesecake Factory is on a growth trajectory on both national and international fronts. The company currently operates 173 restaurants, including the two units opened during the third quarter of 2012.
The company expects to unveil as many as eight restaurants in fiscal 2012, of which four units have already been opened. At present, management aims to open as many as 8 to 10 new company-owned restaurants in fiscal 2013.
Other western restaurateurs with prominent presence in the Middle East are Yum! Brands Inc. (YUM) and Krispy Kreme Doughnuts Inc. (KKD). Cheesecake Factory currently carries a Zacks #4 Rank (short-term Sell rating). We have a long-term Neutral recommendation on the company.