Groupe Le Duff S.A.

105A Avenue Henri Freville, CS 90712
Rennes, F-35207 Cedex 02
France
Telephone: (33 02) 99 22 23 24
Fax: (33 02) 99 53 05 38
Web site: http://www.le-duff.com

Private Company
Incorporated: 1976 as Brioche Dorée
Employees: 8,000
Sales: EUR 600 million ($986 million) (2005)
NAIC: 722110 Full-Service Restaurants

Groupe Le Duff S.A. is a leading operator of fast-food restaurants in France, with operations in Europe and in North America. The Rennes, France-based company operates a number of restaurant formats, including its flagship Brioche Dorée, a chain of 300 restaurants featuring traditional French food in a fast-food format. The Brioche Dorée chain generates approximately one-third of Le Duff's EUR 600 million ($986 million) in annual revenues. The company's Pizza Del'Arte is the number one chain of pizza and pasta restaurants in France, with 87 restaurants (including 76 franchised locations) and sales of more than EUR 100 million ($120 million). Le Duff also operates a chain of bakeries featuring French breads and pastries under the Fournil de Pierre brand, and more than 50 La Madelaine restaurants in the United States. In addition to its restaurant operations, Le Duff is also a major supplier of fresh breads and pastries to the wholesale market through subsidiaries Bridor Inc., with three plants supplying Canada and the United States, and Bridor France, which supplies the French and European markets. Privately held Le Duff continues to be led by founder and President Louis Le Duff.

U.S.-INSPIRED ENTREPRENEUR IN 1976

Louis Le Duff came from a hardworking family involved in the wholesale and retail fruit and vegetable trade in Plouescat, in the Haut-Leon department of Finistere in the north of France. Le Duff's family also played a role in the modernization and industrialization of the Brittany region's agricultural sector, which transformed the region into one of France's major farm regions.

At the age of 15, Le Duff's parents asked him to leave school in order to come work in the family business. The younger Le Duff joined the family's wholesale operations. As Le Duff recalled to L'Express, the three years spent at his parents business provided the foundation for his future career: "That's where I came to know the difficulties of the life of a negotiator. I was required to sell to merchants much older and experienced than me. At first, I cried because of it. But, it would never have entered my mind to quit."

On the contrary, the experience only whetted Le Duff's appetite to go into business on his own. Leaving the family business at the age of 18, Le Duff returned to school, earning a degree at the École Supérieure de Commerce in Angers. Then, in search of ideas for his own future business, Le Duff decided to travel to Quebec in 1970, enrolling in the business school at the University of Sherbrooke, near Montreal. By the early 1970s, Le Duff had earned an MBA. His master's thesis—detailing the franchise model then being developed in North America—pointed to his future career.

Le Duff remained in the United States and Canada for several years, searching out new business ideas that he could adapt for the French market. Before long, Le Duff had narrowed his choices down to three: telephone-based sales, computer sales and services, and food distribution. In the end, Le Duff chose the latter, in large part because of the lower start-up capital and warehousing costs needed to enter the food market. Le Duff then sought experience on the ground, and began working for the Pizza Delight restaurant chain, at first in Toronto and then in Boston. Next, Le Duff joined General Franchising Corporation, based in New York City, which operated a chain of crepe shops. Le Duff soon decided to test his developing ideas for his own restaurant format and franchising models. For this, he opened his own crepe shop in a ski resort near the University of Montreal, featuring a stripped down, all-black interior with a white piano at the center of the shop.

By 1975, Le Duff was ready to return to France and launch his next business. In order to support himself, Le Duff took a job teaching at the École Supérieure de Commerce de Rouen and the IUT, in Rennes. These positions gave him the free time and the funding to create a new company, Restautel, which functioned as a wholesale supplier to the restaurant industry.

Restautel proved a success. Yet Le Duff quickly recognized that the wholesale market was dominated by a small number of major groups, and his chances of building Restautel into a true contender were slim. By 1976, Le Duff had decided to sell the growing Restautel to Sodexho, already on its way to becoming a leader in the French food distribution market.

The sale of Restautel provided Le Duff with the capital to found an entirely new business, this time incorporating many of the ideas picked up during his time studying the North American fast-food sector. In 1976, Le Duff moved to Brest to open a new restaurant, called Brioche Dorée—named after a highly popular, traditional sweet bread from the Brittany region. Featuring traditional French foods, such as quiches and baguette-based sandwiches, as well as breads and pastries, the new restaurant format offered both sit-down and takeout service, a novelty for France at the time. The concept met with quick success, and enabled Le Duff to begin building up a string of restaurants into the early 1980s. By 1981, the Le Duff network counted 20 Brioche Dorée shops. The success of the chain encouraged Le Duff to step down from his teaching positions in order to devote himself full-time to his business operations.

EXPANDING OPERATIONS IN 1986

Despite his interest in the franchising model, Le Duff maintained control over his restaurant network into the mid-1980s. As Le Duff explained to L'Express: "It's impossible to develop a franchise, and therefore teach the business to others, without having been in the business." By 1986, however, with 50 restaurants under his control, Le Duff decided it was time to accelerate the group's growth by creating its own franchise network. The adoption of the franchise model was especially important to the group's ambitions to expand the Brioche Dorée format onto an international level.

By then, Le Duff had begun developing two new directions for his growing company. The first came in 1983, when Le Duff launched a second restaurant concept, the pizzeria format Lucio. Initially established as a city center format, the Lucio restaurants were redeveloped to include out-of-town locations by the end of the 1980s.

COMPANY PERSPECTIVES

The Keys to Success: a team of trained and highly qualified professionals sharing the same motivation—trust and satisfaction of the customer; a large range of quality products in constant development; prime high street and shopping center locations; a warm welcome and a relaxed atmosphere; a permanent research for developing new products; an ongoing commitment to quality control from the production process to the final customer.

Meanwhile, Le Duff had returned his focus on Canada, where, following the continued growth of his original Montreal bakery shop, he decided to develop a new company producing breads and pastries on an industrial scale. By 1984, Le Duff had named the new business Bridor, and quickly expanded his production capacity in order to supply the Quebec, and then Canadian, market. By 1988 and encouraged by the success of Bridor in Canada, Le Duff brought the format to France, establishing a large-scale production facility in Servon-sur-Vilaine, near Rennes. From there, Bridor rapidly expanded to serve the larger European market. This expansion was aided in part by the growing international franchise network of Brioche Dorée, which was in the process of entering a growing number of European markets.

The strength of the Bridor operation enabled Le Duff to begin scouting for a new acquisition, in order to strengthen the group's position in the retail baked goods market. The rise of the giant distribution group and the increasing dominance of the retail sector by the country's large hypermarkets and supermarkets had by then inspired a backlash against the industrialization of the French bread sector. In a country that once started a revolution over a bread shortage, the bread question reached the French legislature, which passed laws codifying the bread industry and a bakery's right to claim that its bread was prepared using traditional artisan's methods.

The law nonetheless inspired a paradox of the rise of bread brands, based on recipes developed by the country's large flour millers and food companies. Le Duff, too, recognized the opportunity in combining industrial production methods with artisan quality, and in 1989 acquired the bakery chain of Fournil de Pierre stores.

RESTAURANT LEADER IN THE NEW CENTURY

The next step in the creation of the larger Le Duff group came in 1995, when the company agreed to pay an estimated FRF 300 million (approximately $50 million) to hotel group Accor for its own pizza restaurant chain, Pizza Del'Arte. The acquisition helped to double the Le Duff group's size, establishing it among the major French restaurant groups. Under Le Duff, the flagging Pizza Del'Arte chain, launched in the early 1980s and unprofitable since the early 1990s, underwent a dramatic facelift. By the end of the decade, the chain, which absorbed Le Duff's Lucio chain as well, was once again growing strongly, becoming the largest chain of pizza restaurants in France. Part of that development came with the launch of a new restaurant format, which saw the development of a new style of Pizza Del'Arte restaurants located along the country's major roads.

Le Duff continued to build up its Bridor wholesale business during the 1990s and into the 2000s as well. In 1995, the company expanded its Canadian base with the construction of a new 46,600-square-foot factory in Boucherville. This was followed by the company's extension into the United States, where the company bought a new baked goods factory located in Vineland, New Jersey. With production space of more than 142,000 square feet, Bridor was equipped to back its expansion into the U.S. market.

KEY DATES

1974:

Frenchman Louis Le Duff opens his first baked goods café in Montreal.

1975:

Le Duff returns to France and founds the wholesale and catering market supplier Restautel.

1976:

Le Duff sells Restautel to Sodexho and opens the first Brioche Dorée restaurant in France.

1983:

The new pizza restaurant format Lucio debuts.

1984:

Industrial production of baked goods for the Canadian wholesale sector is launched under the Bridor subsidiary.

1988:

Le Duff founds Bridor France near Rennes.

1989:

The Fournil de Pierre retail baked goods network is acquired.

1995:

The Pizza Del'Arte pizza restaurant network is acquired from Accor.

1999:

Le Duff launches the new highway roadside Pizza Del'Arte restaurants.

2001:

The La Madelaine restaurant chain in the United States is acquired.

2002:

A new Bridor production facility is acquired in New York.

2005:

Le Duff announces plans to expand the La Madelaine chain to 100 by 2007.

By then, Le Duff had added restaurant interests in the United States as well. This came through the acquisition of the La Madelaine restaurant chain in 2001. The Madelaine chain featured traditional French baked goods in a café setting, strongly complementing Le Duff's European-based Brioche Dorée chain. Founded in Texas in 1982, Madelaine had experienced strong growth, topping 60 restaurants; yet into the new century, the chain proved unable to sustain its growth. Le Duff promptly set to work revitalizing the Madelaine format, and by mid-decade had announced its plans to expand the restaurant chain to as many as 100 by the end of 2007. With five strong businesses and an international network of more than 500 restaurants, Groupe Le Duff had become one of the largest and most dynamic restaurant groups in France and beyond.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Bridor Inc. (United States); Le Duff America Inc. (United States).

PRINCIPAL COMPETITORS

Sodexho Alliance S.A.; Medirest; Groupe Elior; McDonald's France Services; Domino's Pizza France; Compass Groupe France; Relais H S.N.C; Eurest France S.A.; Avenance; Flunch; Groupe Flo S.A.; Buffalo Grill; France Quick S.A.S.; Leon de Bruxelles S.A.

FURTHER READING

Bernstein, Charles, "French Evolution," Chain Leader, February 1, 2003.

"De la Pratique a la Théorie," Revue PME, June–July 2004.

"Duff America's Bridor Inc. Subsidiary," Snack Food & Wholesale Bakery, January 2004, p. 8.

"Groupe Le Duff America," Snack Food & Wholesale Bakery, January 2004, p. 8.

"Groupe Le Duff: L'Alliance du Rustique et de la Technologie," Observatoire de la Franchise, October 12, 2005.

Robinson-Jacobs, Karen, "Saying 'Bonjour' to the Competition," Dallas News, June 12, 2004.

Trentesaux, Jacques, "La Mêne Force que le Compagnonnage," L'Express, March 16, 2003.