Restaurants unable to sustain annual revenue growth of around 6.2 percent risk losing ground in North America's crowded market, according to MenuSifu, the restaurant technology company whose operational data spans more than 10,000 restaurants.

That threshold framed the discussion at the recent TOA Los Angeles Summit, where executives from Chinese and other Asian restaurant brands argued that exporting authentic dishes across the Pacific is now the easy part. The harder questions are when to expand, whether to franchise, and how to localize supply chains as labor, rent, ingredient and customer-acquisition costs keep shifting.

"Most Chinese restaurant founders should approach the US as a completely new market with a mindset of learning and integration," said Huang Geng, founder of the Huang Ji Huang chain and chief consultant for the Chinese Dining Business Division at Yum China. He told the conference that a formula proven in China cannot be assumed to work unchanged in the US, and that executives must study local laws, financial planning and human resources while leaning on local partners and franchisees.

The summit was hosted by TOA (Taste of Asia), a business platform initiated by the North America Asian Food Industry Association, and drew restaurant executives, franchisees, investors, supply-chain companies and technology providers from Asia and North America.

"Today, what really concerns restaurant owners is no longer simply what kind of restaurant to open," said TOA founder Cosmo Hu. "They are asking when is the right time to expand, whether franchising is a better way to enter the market, how an Asian brand can truly establish itself in the US, and how to build the business model as labor, rent, ingredient and customer-acquisition costs continue to change."

California as proving ground

For many Asian brands, California remains the natural first US stop, given its large Asian communities and mature restaurant market. Those advantages come bundled with high costs and heavy regulation — and, in the view of Amy Duan, founder of The Chihuo, that is precisely the test.

"California is the strictest market for doing business due to the regulations, so we believe that if you can make it in California, you can make it anywhere," Duan said.

The economics justify the friction. California's nominal GDP reached $4.25 trillion in 2025, keeping it the largest state economy in the US and one of the world's largest. Even within the state, operators split the market: Andy Kuo, CEO of 85C Bakery Cafe — which opened its first US store in Irvine in 2008 — said Southern and Northern California require different business approaches, and that mastering those variations can prepare a company for Phoenix, Las Vegas or Texas.

"One of the key questions is which parts of a successful business model can be replicated and which need to be fundamentally rethought when expanding internationally," Kuo said.

Bafang Dumpling, which entered through Southern California in 2022, is holding off on franchising until operations are fixed. "We still have a journey to understand and fix all the operations before we open up a franchise," said CEO Stephanie Peng, who noted that an Asian customer base provides a foundation but long-term growth requires reaching a broader US audience. Franchising, she said, is a long-term relationship rather than an investment transaction.

MenuSifu co-founder and COO Li Yu said the company's data suggests newcomers often find a clearer route to market by joining an established franchise rather than building a brand from scratch. He pointed to China's "flexible supply chain" model — rapid response to demand shifts, fast new-product introduction and adjustable sourcing — as a source of lessons for North American operators.

Buying a platform instead of building one

Japan's Monogatari Corporation illustrated how entry methods differ by market. The company entered China in 2012, built its Meat & Rice concept from scratch in Shanghai and grew it to more than 60 locations. For its 2025 US entry, it bought existing teppanyaki restaurant operations instead.

"What we bought was not just a restaurant, but a platform for learning the market," said Masamichi Okada, a senior managing executive officer at Monogatari. The acquisition delivered an existing customer and revenue base, employees, supplier networks, operational know-how and familiarity with local regulations.

Local ducks, Indiana farms

Localization is also forging new supplier links in the US Beijing's DaDong Roast Duck is expanding into North America with Xiaomai Group, which has built standardized supply chains for Chinese cuisine in the US and developed adapted products including Peking duck pizza, burgers, sandwiches and spring rolls.

The hardest problem was sourcing. "The ducks have to be locally sourced, but the quality of ducks available in the US initially did not meet the standards required for authentic Peking duck," said Michael Wang, executive director of Xiaomai Group. Partnerships with farms in Indiana have since addressed much of the gap.

"We need hundreds of thousands of ducks a year, and potentially more than 1 million, for production," Wang said. "This represents a significant business opportunity for local farmers."

Condiment supplier Haitian is positioning itself similarly. "Our stable supply chain enables us to maintain market supply and stable prices even during periods of significant tariff volatility," said Su Wanting, the company's US marketing director.

Robots and AI, with limits

The National Restaurant Association said operators are increasing investment in digital ordering, automation and data analytics. Happy Lamb and California Pizza Kitchen have already deployed robots for repetitive tasks such as food delivery, guest guidance and cleaning, according to conference speakers.

Deng Tianzhuo, chief marketing officer of Zoowork AI, argued AI should function as part of a broader operating system. "By analyzing information from point-of-sale systems, delivery orders, customer reviews, competitors and surrounding commercial areas, AI can help operators identify problems and business opportunities before moving on to diagnosis, execution and evaluation," he said.

Rich Zhou, founder and CEO of Urbot, counseled restraint: many existing restaurants lack pathways or space for automated equipment. "Rather than pursuing automation for its own sake, business operators should focus on areas where technology can generate measurable improvements in efficiency," he said.

Legal planning remains a human constraint. Lawyer Hu Xiaomin said brands dependent on specialized chefs, R&D staff, store managers and operations professionals must plan key-personnel visas before expanding, since the legal entry of key talent has become a critical early-stage issue.

With growth thresholds rising and costs still climbing, the operators most likely to scale in North America will be those that treat localization as an organizational and supply-chain discipline — not a menu exercise.