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Burger King is targeting more than 4,000 restaurants in China by 2035, from its current footprint of about 1,250 in the market. The goal was reiterated upon the completion of a joint venture between parent company Restaurant Brands International and investment firm CPE, previously announced in November.
The joint venture includes a $350 million investment of primary capital from CPE to support the burger chain’s growth, marketing, menu innovation, and operations. With the joint venture, Burger King is expected to leverage CPE’s local knowledge to accelerate development. It also fits into RBI’s previously disclosed target of hitting 5%-plus net restaurant growth toward the end of its 2024 to 2028 outlook period.
CPE now owns approximately 83% of the business, with RBI retaining a 17% minority interest and a seat on the board of directors.
Additionally, the transaction fits into RBI’s plan to return to a more simplified, highly franchised business, the company said. Under the terms of the transaction, a wholly owned affiliate of Burger King China has signed a 20-year master development agreement, granting it exclusive rights to develop the Burger King brand in China. RBI will recognize royalties from the Burger King China business in its international segment, with a step up to the business’s full historical royalty rate over time.
«China remains one of the most important long-term growth opportunities for the Burger King brand globally. With CPE as our partner and a clear strategy focused on food quality, restaurant execution, and brand relevance, we believe Burger King China is well positioned to build a high-quality, sustainable business,” RBI chief executive officer Josh Kobza said in a statement.
During RBI’s third quarter earnings call in October, Kobza said Burger King China results have exceeded expectations, with same-store sales up 10.5%.
“Under the leadership of our new local team, we’ve continued to strengthen operations to build a stronger foundation for long-term growth. The results we’re seeing at Burger King China reinforce our conviction that it is a high potential business. supported by strong brand awareness, favorable category dynamics, and improving unit economics.”
CPE’s portfolio focuses on three sectors — technology and industrial, consumer and healthcare, and infrastructure.