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
Sarah Lockyer will join Winsight as its senior vice president of content, reporting to Chief Content Officer Grey Montgomery, effective Feb. 1. She will oversee the content strategy development and...
2
Whether you’re offering all-day coffee service as part of a catering package or you’re serving fresh-brewed coffee to hundreds of guests off-premise, you want each cup to be a memorable one...
3
McDonald’s lost ground in its domestic turnaround effort at the end of 2016, with same-store sales for U.S. restaurants slipping 1.3% for the fourth quarter. The company attributed the decline to...
4
A group newly formed to protect and promote the restaurant industry’s interests in the courts is awaiting a response to its initial effort, a push to make tip pooling legal again. The Restaurant Law...
5
In this column, we have previously addressed whether managers and owners can have a share of an employee tip pool, even if they participate in serving guests. The answer is emphatically no, under the...
6
[ View the story "How Wendy's tackles trolls" on Storify ]
7
Providing exclusive consumer trends and insights to enhance your marketing strategy. Powered by Technomic . “Technomic is a Chicago-based consulting and research firm providing a 360° view of the...
8
The meal-ending cup of coffee might be the last chance you have to impress diners. Make it a memorable one by brewing coffee in large batches in the best way. Brewing (and holding) high-volume coffee...
9
Despite McDonald’s sales and traffic challenges, the burger giant remains the best in class in restaurant franchising, according to a just-released ranking of franchised brands. McDonald’s was the...
10
Where’s the beef? With many consumers looking to lower saturated-fat intake and raise fiber consumption while making environmentally conscious purchasing decisions, plant-based proteins are replacing...