Jollibee Foods taking acquisition path to China, US
Fast-food chain Jollibee Foods Corporation is seeking acquisitions to accelerate expansion plans in China and the US.
Targets could include other fast-food chains as well as fast-casual restaurants like Smashburger, the US franchise of which Jollibee owns 40 per cent, says president Ernesto Tanmantiong.
“We are looking at the world arena. Acquisition is part of our growth strategy.”
Jollibee is on track to meet its goal of doubling profit in the five years through to 2019, and Tanmantiong says he now wants it to be one of the five biggest restaurant chains by market capitalisation globally. Its current market value is US$5.2 billion.
Jollibee runs more than 3500 stores globally, with its best-selling item being Chickenjoy. Three-quarters of its outlets are in the Philippines.
“We are optimistic with the future of the Philippine market,” says Tanmantiong. “Major pillars will still be the Philippines, China and US, though we don’t close our door to opportunities in other geographic areas.”
Filipino diaspora focus
Its expansion plans focus on overseas locations that have a concentration of Filipinos, like California, Florida, Guam and Hawaii. The chain opened its first Florida store in March, making it the 36th outlet in the US.
Jollibee spent $100 million for its stake in Smashburger in 2015, which had 362 stores in the US at the end of June. The Philippines company has completed 12 deals valued at about $301 million since 2010, according to Bloomberg data, and has considered about 20 potential acquisitions during the past two years.
While it is reportedly considering a bid for UK sandwich chain Pret A Manger, Tanmantiong says the company hasn’t made any bids in recent months. He became president/CEO in 2014. His older brother, Tony Tan Caktiong, founded the chain as an ice-cream parlor in Quezon City in 1975.
Jollibee’s Chinese businesses include Hard Rock Cafe and it own outlets in Hong Kong, and on the mainland such brands as Dunkin’ Donuts, noodle chain Yonghe King and congee outlet Hong Zhuang Yuan.
“China is now one of the highest growth areas in our business,” says Tanmantiong.
The company also wants to take its Philippine chicken barbecue chain Mang Inasal and its Chinese restaurants global.