Burger King Agrees To Add 1,000 Franchised Units In China

Burger King said Friday it has entered into a joint agreement with a master franchisee and a private equity firm with the plan of opening 1,000 restaurants in China over the next five to seven years.

The Miami-based chain's parent company, Burger King Worldwide Holdings Inc., will work with members of the Kurdoglu family as master franchisees, along with global private equity firm Cartesian Capital Group in what is the burger chain's largest multi-unit development deal. Terms of the deal were not disclosed.

As a result, the Kurdoglu family will also become the system's largest franchise operator and will hold exclusive rights to further expansion in China, where there are 63 Burger King locations currently.

The Kurdoglu family operates TAB Gida Industry and Trade Co., the chain's largest international franchisee, which operates about 450 Burger King locations in Turkey, as well as outlets of Sbarro, Popeyes and Arby's, Burger King said.

Burger King joins a several other U.S.-based chains that have ambitious goals for growth in China.

Yum! Brands Inc., has said it expects to add 600 more restaurants to China, where it has more than 3,700 KFC units and more than 750 Pizza Huts, as well as China-based concepts East Dawning and Little Sheep.

Starbucks recently upped its plans for growth this year in the Asia Pacific region, with 400 locations of the coffeehouse chain planned for China alone.

Dairy Queen and McDonald's also have a strong and growing presence in China.

Burger King's plan for China follows a previously announced strategy for global expansion. Last week, Burger King announced a plan to open several hundred restaurants in Russia over the next few years in a joint venture with Burger Rus, the largest franchisee in Russia, and VTB Capital. Burger Rus operates 54 Burger King locations currently.

Last July, the company announced a similar agreement to open several hundred restaurants in Brazil.

"Expanding our brand's presence in China further exemplifies our company's commitment to strengthening our global restaurant portfolio and establishing a strong brand presence in key growth markets around the world," said Elias Diaz Sese, president, BK Asia Pacific, in a statement. "We have partnered with solid investors and experienced restaurant operators to accelerate our net restaurant growth in China, while introducing our signature great-tasting, fire-grilled menu items to millions of consumers in the country."

Burger King operates or franchises 12,500 locations in 82 countries and territories worldwide.

The chain is owned by 3G Capital Management and is in the process of becoming a public company again in a deal announced in April with U.K.-based Justice Holdings.

Contact Lisa Jennings at lisa.jennings@penton.com.
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