LOCAL FASTFOOD giant Jollibee Foods Corp. is investing $41 million to ramp up its global expansion by taking over the US franchise of homegrown Chowking and buying into an Asian venture owning a restaurant chain that includes Hard Rock Cafe.
In a disclosure to the Philippine Stock Exchange Friday, JFC said it would take over the operations of a chain of 20 US-based Chowking restaurants currently operated by its foreign-owned master licensee, Fortune Food Service Co. Inc. and its related parties. Such assets—which include 18 Chowking stores in California and one each in Nevada and Washington—will be purchased by JFC for $16 million.
“With this acquisition, JFC will be poised to take a more active role in the further growth of the Chowking business in the US,” the disclosure said.
In a separate disclosure, JFC committed to invest $25 million in a joint-venture platform with Vietnam-based Viet Thai International Joint Stock Co. to own and operate a chain of restaurants in various territories including Vietnam, Hong Kong, Macau and southern China.
Viet Thai is the owner and operator in Vietnam of Highlands Coffee, Hard Rock Cafe and several smaller food outlets. It also owns Hard Rock Cafe in Hong Kong.
With its investment, JFC will own 49 percent of the joint-venture company in Vietnam and 60 percent of the partnership in Hong Kong that will include the current restaurant businesses of Fortune group and its related parties.
Additional restaurant chain
Part of the Asian investment will be used to fund the acquisition by the joint venture of an additional restaurant chain. Upon completion of such transaction, the JFC-Viet Thai venture was expected to have a total of 139 outlets, including 118 in Vietnam and 21 in five other countries across the region, the disclosure said.
JFC, the dominant player in the Philippine quick-service restaurant industry, is increasingly turning to the overseas market for future growth. Its offshore business, which now accounts for about a fifth of worldwide sales, is targeted to be as big as its domestic operations by 2017.
JFC said its subsidiary, Tokyo Teriyaki Corp., had signed an agreement to acquire and take over the Chowking chain by May 27 this year, during which an initial $12 million would have been paid out of the $16-million purchase price. The JFC unit will pay $800,000 to the Fortune group annually over the next five years.
JFC said the execution of definitive agreements with Viet Thai would be subject to compliance with certain conditions, including relevant government and third-party approvals for the transaction.