THE joint venture between Jollibee Foods Corp. (JFC) and Asian investment firm RRJ Capital Master Fund II L.P. will open the first of the 1,459 Dunkin’ Donuts outlets in China by the fourth quarter of the year.
In a statement submitted by JFC to the Philippine Stock Exchange (PSE) Dunkin’ Donuts said the 1,400 Dunkin’ Donuts outlets all over China in the next 20 years.
This is the fourth joint venture of JFC in China, with the other three being a commissary in Anhui Province and the operations of San Pin Wang and 12 Sabu, according to JFC investor relations director Cosette Palomar.
“The Dunkin’ Donuts deal provides us with an excellent opportunity to operate and expand one of the leading global coffee chain brands in the second largest economy in the world,” Palomar told The Manila Times in a short email interview.
“The venture, which would capitalize on the increasing affluence of the Chinese consumer, fits perfectly well within our three strategic pillars of the Philippines, China and the United States,” she added.
Tony Tan Caktiong, JFC chairman, said that the Dunkin’ Donuts franchise in China will offer “a tremendous opportunity as its consumer base continues to grow in number and spending power.”
Charles Ong, co-chief executive officer of RRJ, said: “There is a strong demand in China for Dunkin’ Donuts high-quality foods and beverages.”
Last month, JFC international unit Jollibee Worldwide Pte. Ltd. (JWPL) and RRJ’s Jasmine Asset Holdings Ltd. signed a joint venture deal — forming Golden Cup — to franchise the Dunkin’ Donuts brand in China. This was followed by a master franchise agreement with Dunkin’ Donuts Franchising LLC soon after.
Golden Cup is the joint venture company of JFC and RRJ, 60 percent of which is held by the Jollibee Group and the remaining 40 percent by RRJ.
JFC will infuse $180 million into the joint venture and operate the Dunkin’ Donuts chain in China, while RRJ will provide the remainder of the $300 million funds committed by the joint venture for the franchise.
The joint venture will open Dunkin’ Donuts shops across regions in China including Hong Kong, Macau, Fujian, Hunan, Guangdong, Hainan, Guanxi, Beijing, Tianjin, Hebei, Shangxi, Chongqing, Sichuan, Yunnan, Heilongjiang, and Jilin.
Dunkin’ Donuts is a donut and coffee chain known worldwide, serving 5 million customers daily. Its products include 52 donut varieties, more than a dozen coffee drinks, and an array of bagels, breakfast sandwiches and other pastries.
As of end-September, Dunkin’ Donuts operated 11,123 stores across the globe, consisting of 7,941 franchised restaurants in the US and 3,182 shops in 34 countries.
Hong Kong and Singapore-based RRJ Capital Master Fund II, L.P. is an investment company that focuses on businesses across the energy, financial institutions, consumer, food, and environmental sectors in China, North America and Europe.
Besides Jasmine, Jollibee Group has a 50 percent interest in other joint-venture businesses including the 75 outlets of Highlands Coffee in Vietnam and the Philippines; 55 stores of Pho 24 in Vietnam, the Philippines, Indonesia, Cambodia, Macau and Korea; as well as the 19 stores of 12 Sabu in China.
JFC programmed capital expenditure of P9.1 billion for 2015, up 42 percent from the P6.7 billion set in 2014, due to higher outlays for commissary investments and expansion.
The company’s January to September 2014 net income grew 18 percent to P3.7 billion from the P3.13 billion recorded a year earlier, while total sales also rose 13 percent to P65.75 billion from P57.83 billion previously on sustained same-store sales and growth in store network.
To date, JFC has 2,886 stores worldwide — 2,283 in the Philippines and 603 abroad across China, Vietnam, Brunei, Saudi Arabia, Qatar, Kuwait, Singapore, Oman, United Arab Emirates, and the United States.