QSR Magazine: McDonald’s Increases Stake in China Business

McDonald’s is increasing its investment in China, its second largest market behind the United States. 

The franchise agreed to acquire the minority ownership stake of investment firm The Carlyle Group, which will increase its stake from 20% to 48% when the deal is finalized. China-based CITIC Capital still controls the other 52%. 

McDonald’s sold its China business in 2017 for $2.08 billion and began a partnership with CITIC Capital and The Carlyle Group with the goal of doubling its footprint from 2,500 to 4,500 by 2022. By the end of Quarter 3, the market had 5,582 restaurants. China’s systemwide sales have also grown over 30% year-to-date since 2019. Now, the company wants to reach more than 10,000 restaurants by 2028. 

“We believe there is no better time to simplify our structure, given the tremendous opportunity to capture increased demand and further benefit from our fastest growing market’s long-term potential,” CEO Chris Kempczinski said in a statement..

Yichen Zhang, chairman and CEO of CITIC Capital and chairman of McDonald’s China, noted the company is “more confident than ever in [its] ability to serve the Chinese consumer with McDonald’s iconic taste.” 

Notably, a resounding 90% of business comes via digital channels. Earlier this year, Kempczinski said that the country is “making tremendous progress in running the restaurants more efficiently, all with the use of data and technology” and that this would “provide great learnings for the rest of [the] system.”

Read the full article here. 

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