FASTFOOD giant Jollibee Foods Corp. on Tuesday said it sealed the deal to become the master franchise holder of Dunkin’ Donuts in China.
The company said its joint venture firm Golden Cup Pte. Ltd. signed a deal with Dunkin’ Donuts Franchising Llc. for the master franchise agreement that will exclusively develop the brand in several Chinese territories, including Hong Kong and Macau.
Golden Cup is a joint-venture entity formed by Jollibee’s international unit and Jasmine Asset Holding Ltd.
Jollibee controls 60 percent of Golden Cup and the rest by Jasmine Asset.
According to the agreement, the Manila-based fastfood giant, famous for its Jollibee stores, will develop the American doughnut brand in territories, such as Hong Kong, Macau, Fujian, Hunan, Jianxi, Guangdong, Hainan, Guanxi, Beijing, Tianjin, Hebei, Shangxi, Chongqing, Guizhou, Sichuan, Yunnan, Heilongjiang and Jilin.
The company said Golden Cup has committed to invest up to $300 million, some $180 million of which will be spent by Jollibee in proportion to its ownership, while the rest will come from Jasmine Asset.
“The JV will open and operate a minimum of 1,459 shops in China over 20 years, based on an agreed development schedule,” it said in an earlier statement.
As of the third quarter this year, Dunkin’ Donuts has 11,123 stores worldwide, of which 7,941 were franchised.
In the Philippines, Golden Donuts Inc. of the Prieto family owns the master franchise of Dunkin’.
Jasmine Asset, Jollibee’s partner, is a subsidiary of RRJ Capital Master Fund II Lp., established by RRJ Capital, an investment firm with offices in Hong Kong and Singapore.
This is not the first that the fastfood giant entered the doughnut market. Jollibee had a doughnut brand in the Philippines under Donut Magic Philippines Inc., but the brand did not take off.
Jollibee’s net income rose in the third quarter to P1.2 billion, a 15-percent increase from last year as both its domestic and international operations continue to grow.
The company said its operating income grew 16 percent to P1.41 billion, as revenues increased by 11 percent to P22.05 billion.
Its third-quarter figures brings its income for the first three quarters of the year to P3.71 billion, some 18 percent higher than last year’s P3.14 billion.
For this year, the company is allocating a capital expenditure of P9.1 billion, higher than the estimated spending of P6.3 billion this year.
The company earlier said it has a capital-expenditure (capex) budget of P9.3 billion for 2014. Of the amount of capex for 2015, P6.3 billion is allocated for the Philippine market, P1.7 billion in China and the balance will be for the US, Southeast Asia and the Middle East markets.