Jollibee Foods Corp. forays into the Vietnam, HK, Macau and South China markets — with eyes on acquiring Hard Rock Café — even as the fastfood giant buys back its Chowking restaurant chain in the United States through Jollibee Foods subsidiaries abroad.
Jollibee Foods on Friday announced in separate reports to the Philippine Stock Exchange its plans to consolidate acquisitions abroad.
The Philippine fastfood giant said it has entered into an agreement that will pave the way for the company to own restaurants in Vietnam, Hong Kong, Macau and Southern China.
Jollibee Foods said its wholly-owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL) signed a framework agreement with Viet Thai International Joint Stock Corp. to establish a platform to own and operate a portfolio of restaurants in those territories.
Under the agreement, JWPL will invest $25 million to own 49 percent of the joint venture company in Vietnam and 60 percent of its company in Hong Kong, which will include the current restaurant businesses of Viet Thai and its affiliates.
Besides the investment, JWPL will also pay Viet Thai $35 million. The payment scheme carries a yearly 5-percent interest.
“Part of the investment will be used to fund the joint venture’s acquisition of an additional restaurant chain. Upon completion of such acquisition, the joint venture is expected to have a total of 139 outlets across its brands, including 118 in Vietnam and 21 others in five countries," Jollibee Foods said.
Based in Vietnam, Viet Thai owns and operates the Highlands Coffee, Hard Rock Café and other smaller food outlets in Vietnam; it also owns Hard Rock Café in Hong Kong.
Jollibee Foods said Viet Thai turned in a “positive" profit for 2010 while sales reached about $30.2 billion.
Jollibee buying back Chowking in US
On the other side of the globe, Jollibee Foods will take back all 20 Chowking stores in the US from a master licensee.
Jollibee Foods said its subsidiary, Tokyo Teriyaki Corp., has signed an agreement to reacquire all of 20 Chowking stores in the US from Fortune Food Service Co. Inc. and its related companies.
The Fortune Group currently owns and operates all Chowking stores in the US, 18 of which are in California and one store each in Nevada and Washington. Tokyo Teriyaki will formally take over the stores by the end of the business day on May 27, 2011.
Jollibee Foods will be paying $16 million for the acquisition. An initial payment of $12 million will be made on the take-over date and the rest shall be paid annually over the next five years.
“With this acquisition, Jollibee Foods will be poised to take a more active role in the further growth of the Chowking business in the USA," the company said.
Jollibee Foods added that the earnings of Chowking stores in the US are “positive" as sales last year reached $19.2 million.
Jollibee Foods operates 1,931 stores in the Philippines and 407 abroad. Besides Jollibee and Chowking, its brands include Mang Inasal, Red Ribbon, Caffe Ti-amo, and Greenwich, among others. — MRT/VS
