MANILA, Philippines – Jollibee Foods Corporation (JFC) wants more stake in US-based burger chain Smashburger.
This is in line with the fast food giant's attempt to conquer foreign markets, which Jollibee has had modest success in compared to its local sales.
The Jollibee chain has only 616 foreign branches, compared to its 2,643 stores here in the country, its 2016 annual report showed.
To eat a larger pie of the foreign market, the Tony Tan Caktiong-led company has been investing in several foreign restaurants that are leading in terms of market share.
Its latest venture is to amend its agreement with Smashburger Master, to acquire additional 45% stake in Smashburger starting 2018.
Headquartered in Denver, Colorado, Smashburger is a leading fast casual burger chain. It currently has 374 restaurants mostly in the United States.
Bee Good! Incorporated, a wholly-owned unit of JFC, and Smashburger Master have amended their agreement to allow the Philippines' largest restaurant company to buy more shares from the parent company of Smashburger business, between the years 2018 to 2021, JFC told the local bourse on Tuesday, March 14.
American's appetite for upmarket fast food
Under the original agreement, Bee Good! was entitled to buy from Smashburger Master an additional 35% of the American burger chain's parent firm and to acquire the balance of 35% between 2019 at the earliest and 2026 at the latest.
"With the amendment Bee Good! will be entitled to purchase an additional 45% of [Smashburger's parent firm] between the years 2018 to 2021 and acquire the balance of 15% between the years 2019 at the earliest and 2026 at the latest," Jollibee said.
It was in October 2015 when Jollibee completed the acquisition of 40% in Smashburger for $99 million. The purchase allowed the chain to boost its US presence.
Acquiring more stake in Smashburger will allow Jollibee to benefit from Americans' increasing appetite for upmarket fast food chains.
Smashburger estimates system wide sales of approximately $339 million in 2015, an amount equivalent to 12% of JFC’s estimated worldwide system wide sales for the same year.
For 2017, Jollibee plans to open more than 300 stores both here and abroad. – Rappler.com