Restaurant Brands International (RBI) has recently confirmed a $350 million investment deal toward their Burger King China operation via a newly formed partnership with Chinese alternative asset manager, CPE. With a well-established reputation for scaling consumer brands within the Chinese markets, CPE’s primary investment will facilitate expansion, marketing, menu innovation, and operations for Burger King’s restaurants across China.
This joint venture is targeting to more than triple the current Burger King presence in China, from approximately 1250 restaurants to a projected 4000 by the year 2035. Joshua Kobza, CEO of RBI, highlighted the significance of this partnership, recognizing China as “one of the most exciting long-term opportunities for Burger King globally.” The recent investments and newly formed joint venture underscore their confidence in the Chinese market.
Additionally, Kobza emphasized the potential benefits of this partnership, noting how combining the iconic Burger King brand and RBI’s global scaling abilities with CPE’s local market knowledge and operational expertise can unlock the business’s full potential in China.
The completion of this transaction, which is anticipated for the first quarter of next year, will result in CPE owning approximately 83% of Burger King China, leaving RBI with an ownership stake of approximately 17%.
Further to the partnership, a wholly-owned affiliate of Burger King China will sign a 20-year master development agreement. This will grant the affiliate exclusive rights to develop the Burger King brand within the Chinese market.
This joint venture aligns with RBI’s broader strategy of pairing with experienced local operators and investors to drive profitable growth. This approach, while maintaining a primarily franchised business model globally, is aiming for a net restaurant growth of 5% or more by the end of the 2024-2028 outlook period.
This recent partnership follows an earlier transaction in February, where RBI purchased stakes in Burger King China from its local franchisee for an estimated $158 million.
What is the purpose of the joint venture between RBI and CPE?
The joint venture aims at expanding Burger King’s presence in China from about 1250 to over 4000 restaurants by 2035.
What will be the ownership split of Burger King China after the transaction?
Once the transaction is completed, CPE will own approximately 83% of Burger King China, while RBI will hold an estimated 17%.
What are the terms of the development agreement?
A wholly-owned affiliate of Burger King China will sign a 20-year master development agreement, which grants the affiliate exclusive rights to develop the Burger King brand in China.
