Philippine Fast-food chain Jollibee Foods Corp. (JFC) has decided to push through with its expansion plan for the Tim Ho Wan (THW) restaurant franchise in China. It has announced that the opening of the first THW restaurant in Shanghai would signal its first operations in the country.
JFC established a joint venture with Shanghai's Hong Yun Hong Food and Beverages Management Co. Ltd. Through its subsidiary Golden Plate Pte. Ltd. (GPPL) and Dim Sum Pte. Ltd. (DSPL). The said joint venture executed a unit franchise agreement with THW granting the right and license to operate the THW branch in Shanghai.
The Shanghai THW store would be the first restaurant chain of the joint venture in the People's Republic of China. JFC also announced the execution of the joint venture to the Philippine Stock Exchange last Friday.
The report revealed that GPPL owns 60 percent of the joint venture while DSPL owns the rest. Both companies have committed to invest 13 million USD where 7.8 million USD would be contributed by GPPL as its ownership of the venture.
THW was said to be a dim sum restaurant chain from Hong Kong that started in 2009. Its restaurant is called Sham Shui Po that is located in Fuk Wing Street. The said restaurant chain was awarded one Michelin star in 2010.
It was also declared as one of the most affordable Michelin star restaurant chains. The report then revealed that JFC wants to solidify its position by entering the joint venture and label itself as Asia's most valuable restaurant chain.
Furthermore, JFC was also revealed to own and operate two other restaurant chains in mainland China such as Hong Zhuang Yuan and Yonghe King. There is 6.5 percent Chinese ownership of the JFC network while 7.4 percent is owed to global systemwide sales.
Last February, JFC announced the closure of 14 of its Yonghe King outlets in China's central province of Hubei due to public health concerns. The closure represented a percent of the total JFC store network that amounts to 3.6 percent of the total store network in China.
In other news, Reuters reported that since March 9, 2020, JFC experienced the adverse impact of disrupted restaurant operations in China. The report claimed that restriction on international transportation, however, would have a limited impact on JFC's supply chain in the coming weeks.
It was revealed that JFC also sought expansion in the US and invested 540 million USD. It bought Smashburger and Coffee Bean & Tea Leaf Co. to start operating in the US. Its Chinese restaurant chains had caused a drag on its market earnings and the public health crisis continues to threaten its sales projections.
