Unfazed by the China-epicentered coronavirus pandemic, fast-food giant Jollibee Foods Corp. (JFC) is moving forward with its expansion plan for the Tim Ho Wan (THW) restaurant franchise in mainland China, beginning with the opening of the first restaurant in Shanghai.
Hong Yun Hong (Shanghai) Food and Beverages Management Co. Ltd., the joint venture established by JFC’s wholly owned subsidiary Golden Plate Pte. Ltd. (GPPL) and Dim Sum Pte. Ltd. (DSPL), executed a unit franchise agreement with Tim Ho Wan Pte. Ltd., granting the joint venture the right and license to operate the THW store in Shanghai.
This will be the first THW store in the People’s Republic of China, excluding Hong Kong, JFC disclosed to the Philippine Stock Exchange on Friday.
GPPL owns 60 percent of the joint venture firm while DSPL owns the remaining 40 percent. They have committed to invest up to $13 million to the joint venture, of which up to $7.8 million will be contributed by GPPL in proportion to its ownership in the business.
Tim Ho Wan is a dim sum restaurant chain that originated in Hong Kong in 2009. Its Sham Shui Po, Hong Kong restaurant located at 9 Fuk Wing Street has been awarded one Michelin star since 2010.
By investing in the Asia-Pacific master franchisee of THW, dubbed the world’s most affordable Michelin star restaurant chain, JFC seeks to cement its position as Asia’s most valuable restaurant chain.
In 2018, JFC announced an investment of up to 45 million Singaporean dollars (P1.74 billion) in Titan Dining LP, which has executed a binding agreement for the acquisition of 100 percent of Tim Ho Wan Asia-Pacific franchise holder, Tim Ho Wan Pte Ltd. (THWPL). The deal included THWPL’s affiliate DSPL, which owns and operates Tim Ho Wan stores in Singapore.
Aside from DSPL in Singapore, THWPL has franchisees in Cambodia, Indonesia, Japan, Macau, Taiwan, Thailand, Vietnam, Australia and the Philippines, with further development planned in the region.
At the time of JFC’s investment, Titan had a fund size of 100 million Singaporean dollars, with JFC thus 45 percent of total committed investments. The fund is managed by Titan Dining Partners Ltd., formed by individuals with “extensive experience in the region’s food and beverage industry.”
This agreement provides JFC the opportunity to acquire a substantial ownership in the Asia-Pacific franchise when the term of the fund ends in seven years through a purchase mechanism provided for in the agreement with Titan Dining LP. JFC’s involvement as a franchisee in Shanghai is in preparation for such greater role in the THW brand.
JFC also owns and operates two other restaurant chains in mainland China, namely: Yonghe King and Hong Zhuang Yuan. China accounts for 6.5 percent of total JFC network and 7.4 percent of global systemwide sales to date.