Jollibee Foods Corp. to operate Dunkin’ Donuts network in China

FILE PHOTO

MANILA, Philippines—Homegrown fast-food giant Jollibee Foods Corp. is leading a consortium that will invest about $300 million in expanding and operating the Dunkin Donuts network in China, scaling up its footprint in Asia’s largest economy.

This deal cements JFC’s position as the leading restaurant company in terms of market capitalization in Asia, and the second largest among quick service restaurants in the world.

In a disclosure to the Philippine Stock Exchange on Friday, Jollibee said it had formed a joint venture with Jasmine Asset Holdings Ltd., a unit of RRJ Capital Master Fund II, an Asia-based investment company.

Jollibee, through unit Jollibee Worldwide Pte. Ltd. (JWPL), will own 60 percent of the joint venture while Jasmine will own the remaining 40 percent.

The joint venture has committed to open and operate a minimum of 1,459 stores in China over a period of 20 years, based on an agreed development schedule.

Of the $300 million investment committed by the partnership, JWPL will contribute $180 million and will also have management control of this business.

JWPL and Jasmine likewise signed an agreement with Dunkin Donuts Franchising LLC to execute a master franchise agreement, which will give the joint venture the exclusive right to develop the donut brand in the following territories in the People’s Republic of China: Hong Kong, Macau, Fujian, Hunan, Jianxi, Guangdong, Hainan, Guanxi, Beijing, Tianjin, Hebei, Shangxi, Chongqing, Guizhou, Sichuan, Yunnan, Heilongjiang and Jilin.

JWPL expects to invest about $18 Million in the first 12 months of operations. “The projected sales and profit and loss in the first three years are not expected to be significant since the first few years will be focused on developing and building the store model and economics,” the disclosure said.

Dunkin Donut is one of the world’s leading baked goods and coffee chains, serving more than five million customers per day worldwide. It sells more than 52 varieties of donuts and more than a dozen coffee beverages as well as an array of bagels, breakfast sandwiches and other baked goods. As of end-September, there were 11,123 Dunkin Donuts stores worldwide, including 7,941 franchised restaurants in the United States and 3,182 shops outside the US.

Jollibee’s partner, RRJ Capital, has a portfolio that focuses on energy, financial institutions, consumer, food, and environmental services. It has significant investments in the food and consumer sectors in China.

For its part, Jollibee has a network of more than 400 stores in China which was built through the acquisition of local brands such as Yonghe King, Hong Zhuang Yuan and San Ping Wang. The group needs a network of at least 500 stores to break even in China.