McDonald's sells big chunk of turf and control

mcdonalds

McDonald’s has sold a 390-restaurant territory in Singapore and Malaysia to its licensees for markets in Saudi Arabia, creating a new power base within the chain.

The buyers, Sheik Fahd and Abdulrahman Alireza, now have control over nearly 500 restaurants, with more to follow as the partners build out their territories.

Terms of the sale to Fahd and Alireza’s Lionhorn Pte. were not disclosed.

The divestiture is part of McDonald’s strategy of refranchising most of the system to franchisees, freeing cash for shareholders and business development. About 312 of the 390 restaurants sold yesterday were company-operated.

McDonald’s keeps a tight hold on ownership and control of its brand in the United States. Unlike Burger King, Pizza Hut, Wendy’s and Buffalo Wild Wings, it has never allowed a franchisee of scale to go public, for instance.

But it has been much more reliant on sizable partners abroad. Its Latin American licensee is Arcos Dorados (“Golden Arches” in Spanish), a public company, and it has worked with large retailers as partners in Asia.

The U.S.-based chain is currently shopping for a buyer of its Chinese operations.

Today's top stories

1
For many limited-service spots, vegetarian options consist of regular menu items minus the meat: for example, a salad without the chicken, or a saucy pasta dish, hold the sausage. That omission can...
2
Today’s diners are more conscious than ever about the foods they eat—what they’re made of, but more importantly, what they’re not made of. Consumers are interested in, and in some cases, will pay...
3
In today’s rigid labor market, restaurant operators have made headlines launching education benefits , referral bonuses , competitive wages and career development programs to attract workers and coax...
4
Like any kitchen tool, a protective glove is only as good as the skills of the person using it. I know chefs who swear by cut-resistant gloves and others who do not allow them in their kitchens,...
5
Although consumers’ moves toward better-for-you menu items continues to influence operators today, fried foods remain universally popular choices for restaurantgoers. With 84.5% of all operators...
6
After boasting for years that America runs on Dunkin’ , the franchise powerhouse is fundamentally changing to keep up. A menu that reverses years of pushing beyond doughnuts will be in place within...
7
A shutdown of all the Joe’s Crab Shacks in Michigan has raised the tally of units closed by bankrupt operator Ignite Restaurant Group to more than 40, from a base of 113 stores, according to internet...
8
The portion of restaurants’ sales coming from delivery could top 40% by 2020, roughly a sevenfold increase from current levels, according to a recent study from Morgan Stanley. Demand for off-premise...
9
As LSRs battle it out at breakfast, they’re pulling no punches when it comes to innovation. Taco Bell’s Naked Breakfast Taco spring LTO used a fried egg as a “shell” to hold diced potatoes, cheese...
10
The Fast staff took a break from putting this issue to bed for our Restaurant Trends & Directions conference . One of the keynoters was Jonah Berger, author of “Contagious” and “Invisible...