http://0rz.tw/2qXsa
McDonald’s Aims to Sell Taiwan Stores, Expand China Franchise Business
Fast-food operator has typically operated own stores in newer markets to
oversee quality and growth
A McDonald's in Taipei, Taiwan, pictured Thursday. ENLARGE
By LAURIE BURKITT
June 25, 2015 4:16 a.m. ET
BEIJING—
McDonald’s Corp. is aiming to sell its stores in Taiwan to a
franchise operator and expand its franchise business in China, a spokesman
said Thursday, as the company tries to turn around its fortunes in Asia and
cut costs globally.
McDonald’s uses franchisees and licensees in its more mature markets, like
the U.S. But elsewhere it has largely relied on a more costly model of
operating its own stores to oversee their quality and growth.
The Oak Brook, Ill., company’s new chief executive, Steve Easterbrook, has
been overhauling its U.S. business, including by selling more restaurants to
franchises and eliminating management layers. Now he’s turning to the
international market in an effort to boost sales and profits.
Mr. Easterbrook has said global franchise ownership, including the U.S., will
expand to 90% from 81% currently, and that the company will sell 3,500
restaurants to franchisees by 2018.
McDonald’s is looking for a franchise candidate to run its 413 Taiwan
stores, which it has operated itself since entering the market more than
three decades ago, the spokesman said.
McDonald’s operated all its stores in China for more than two decades, until
2008 when it turned to franchising. By the end of last year, around 20% of
its 2,000-plus stores in China were franchised, and the company plans to
continue increasing the licensees and franchisees, the spokesman said. “
Franchising is about growth and economic efficiency,” he said.
McDonald’s sales in Asia tumbled after problems with one of its suppliers
last year affected its available menu items and crippled sales. Sales at
stores open more than a year Japan, where McDonald’s has also faced food
contamination scares, and China declined 32.3% and 4.8%, respectively, in the
first quarter, Kevin Ozan, McDonald’s chief financial officer, said in an
April earnings call. The company says it is still aiming to pull back
consumers that it lost last year.
Executives also said previously that McDonald’s would close 700
underperforming stores primarily in Japan, China and the U.S. Mr. Easterbrook
said the company expects China sales to return to “a normalized level of
performance by midyear.”
Write to Laurie Burkitt at laurie.burkitt@wsj.com