Dive Brief:
- Restaurant Brands International entered into a joint venture with CPE, a Chinese alternative asset manager, to expand Burger King in China, RBI said Monday in a press release. RBI sold its majority stake in its Burger King China business to CPE as part of the deal. CPE now owns 83% and RBI holds 17% and a seat on the board of directors.
- The joint venture plans to increase Burger King’s footprint in the country from 1,250 units to over 4,000 by the end of 2035.The transaction is expected to close in the first quarter of 2026, at which time CPE will invest $350 million of new primary capital to support restaurant growth, marketing, menu innovation and operations.
- While Burger King China is one of RBI’s largest international markets by unit count, its system-wide sales last year only reached $700 million. Comparatively, its top-performing market of Burger King France saw systemwide sales top $2 billion, according to a June presentation.
Dive Insight:
Burger King China’s team has been building momentum over the past few months by focusing on operations, improving sales, boosting marketing and renewing guest engagement, setting itself up for more growth. CPE plans to double its unit count within five years as it works toward its 4,000-unit goal.
This expansion will help RBI meet its previously disclosed 5% net restaurant growth target toward the end of its 2024 to 2028 outlook period, the company said. The transaction is also part of RBI’s goal of becoming a more “simplified, highly franchised business.”
“China remains one of the most exciting long-term opportunities for Burger King globally,” Joshua Kobza, RBI’s CEO, said in a statement. “CPE is a well-capitalized, proven operator with exceptional leadership and extensive consumer and restaurant experience, making them an ideal partner to fuel the next chapter of Burger King China's growth. Together, we can unlock the business's full potential by combining our iconic brand and global scale with CPE's local market and operational expertise.”
Under the terms of the transaction, a wholly owned affiliate of Burger King China will also sign a 20-year master development agreement. It will have exclusive rights to develop Burger King in the country. RBI will recognize royalties from Burger King China as part of its international segment, with a step up in the business’s full historical royalty over time.
Burger King China posted strong same-store sales during the third quarter with growth of 10.5%, Kobza said during an earnings call. Sales were positively impacted by increased marketing of its Crisper Chicken Burger, strong consumer response over a Naruto campaign and delivery growth. Comparable sales are growing faster than Burger King’s domestic business, which were up 3%. Burger King U.S. has also been undergoing a transformation plan that includes remodels and refranchising.
RBI’s transaction comes just a week after Starbucks entered into a joint venture with Boyu Capital for $4 billion with plans to grow Starbucks from 8,000 units to 20,000 locations.
