RRJ, Jollibee secure Dunkin' Donuts China franchise

Jasmine Asset Holding, a wholly-owned subsidiary of RRJ Capital Master Fund II, will hold a 40% interest in the joint venture, with Jollibee taking a 60% stake. The two groups have committed up to $300 million to the business, of which $180 million will come from Jollibee, according to a regulatory filing.

Jollibee will also be responsible for the day-to-day operations of the joint venture. The plan is to own and operate at least 1,459 restaurants in Hong Kong, Macau, Beijing, Tianjin, Chongqing and 13 provinces or regions over a 20-year period, based on an agreed development schedule.

Eastern China - specifically Shanghai and the provinces of Jiangsu and Zhejiang - are not included in the contract. This is because Dunkin' Donuts signed a master franchise agreement in late 2013 with Fast Gourmet Group for the development of more than 100 restaurants in these locations.

The brand first entered mainland China in 2008 with the opening of a shop in Shanghai. This initiative was led by Mercuries & Associates, which at the time was the Dunkin' Donuts franchise partner for Shanghai and Taiwan and planned to launch 150 outlets nationwide over a 10-year period. However, in early 2013 it was announced that the remaining 19 Dunkin' Donuts stores in Taiwan would close.

Dunkin' Donuts is one of the world's leading baking goods and coffee chains, serving more than five million customers per day. As of September 2014, there were 11,123 stores globally, including 7,9141 franchised restaurants in the US and 3,182 restaurants outside of the US. The brand can be found in 34 countries, including a strong presence in South Korea, the Philippines and Indonesia.

Jollibee operates the largest food network in the Philippines with 2,283 outlets nationwide as of November 2014, with brands such as Jollibee, Chowking, Red Ribbon and Burger King. The company also has 603 restaurants overseas, over half of which are under the Yonghe King brand in China. It also operates in Vietnam, Brunei, Hong Kong, Singapore, the US and the Middle East.

Jollibee's total sales came to PHP76.3 billion ($1.7 billion) in 2013 - up from PHP67.5 billion the previous year - with 23.9% generated overseas. Net incomes reached PHP4.7 billion, compared to PHP3.7 billion in 2012.

RRJ, which was set up by Richard Ong, formerly of Goldman Sachs and Hopu Investment Management, has two funds under management with aggregate capital of $5.9 billion invested in companies in China, North America and Europe. Its portfolio covers the energy, financial services, consumer, and environmental services sectors.

The private equity firm closed its second fund in early 2014 at $3.5 billion.

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• Topics
• Consumer
• Greater China
• Expansion
• RRJ Capital
• Consumer
• China
• Joint Venture
• Philippines
• Growth capital