When the Obama administration announced it would begin normalizing relations with Cuba, everyone started making the same “joke” that they wanted to visit the country before it got taken over by McDonald’s and Starbucks.
Fusion actually reached out to both of those companies, as well as a few other chains. Almost all of them gave no indication that they were even looking at the situation there, let alone had contingency plans in place for opening up shop. Even Miami-based Burger King said they had “nothing to add.”
There was one exception.
For the past half-deacde, Los Angeles-based Fatburger has aggressively expanded into locations that don’t exactly scream America-friendly: Saudi Arabia, Pakistan, and soon Libya. Their overseas push is based on a finding that, given rising global obesity rates, may not seem too surprising: People around the world love American burgers, shakes and fries.
“It’s a food group that travels well,” said Fatburger CEO Andy Wiederhorn. "Sushi and Mexican aren't liked everywhere."
The one blank spot on Fatburger’s map is Latin America. So for Wiederhorn, Cuba’s opening may be the signal moment for getting the company’s foot in the door in the region.
“To the extent the opportunity arises, it’s very normal for us to go where other people may not want to go,” he said.
Wiederhorn’s own backstory provides some insight into Fatburger’s approach to risk. In 2004, he pled guilty to filing a false tax return and improperly forgiving a loan guarantee while working as a financier. He spent the next year in prison.
“I saw an awful lot of terrible things," Wiederhorn, now 48, told the LA Times in 2013. "Everything else seems somewhat mild."
Wiederhorn has also made local headlines in Portland, Ore. for owning — and failing to sell — the largest home in the city. And he recently appeared in an edition of "Undercover Boss."
Fatburger’s overseas adventures began in Dubai, during that city’s incredible mid-2000s boom. The experiences gained there soon allowed it to fan out across the Middle East and into Asia. Today the company has now plans to operate in 32 countries. Over half its 200 locations are overseas, including a heavy presence in Arab countries.
Wiederhorn also hopes to one day expand into Iran, against which the U.S. also has heavy economic sanctions, but where he also sees demand for American fast food.
“[Cuba] is no different,” he said.
Of course, many of these markets have their own dietary and sourcing requirements, and Fatburger spends millions to keep its franchises there growing. It helps that these locations are all franchised, allowing local businessmen to tailor the stores to the surrounding environment. Corporates usually take 20 percent of an overseas franchise’s royalties.
In the case of Cuba, Wiederhorn told Fusion, those requirements might crop up. But a greater concern may be the economy itself. Right now the average Cuban earns less than $25 a month.
But Sean Fitzgerald, Chief Development Strategist at brand consultancy No Limit Agency, said it would be a mistake for companies to overlook Cuba once its economy improves, noting that the cost of operating there is likely to be low, assuming reasonable regulations, and that a smaller brand like Fatburger could benefit from being the first to move.
“It could eventually become a nice market for someone who wants to go in there,” he said. “It’s only a half-hour flight from Miami.”
For now, Fatburger’s immediate focus for any new operations will likely be on tourists and the upper crust of Cuban diners. Wiederhorn does not envision opening more than a half-dozen locations there in the coming years.
“We’re not going in with a $10 hamburger,” he said. “But even if it’s a $5 or $3 one, that’s still expensive compared with what they’re used to, in terms of the Communist regime. So it’s going to take a while.”
Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.