McDonald’s Plans 1,500 New Outlets in Korea, China and Hong Kong

Avoiding the temptation of eating unhealthy, fattening foods gets harder and harder in Asia as traditional cooking gets more competition from western fast food chains.

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McDonald’s Corp plans to add more than 1,500 restaurants across China, Hong Kong and South Korea over the next five years as it focuses on high-growth markets to boost sales.

The company also said it was looking for franchisee partners in those markets, where it already has more than 2,800 restaurants, most of them company-owned.

It’s a prudent business move for the company as China, Hong Kong and South Korea, along with a few other high-growth markets such as Russia, accounted for nearly a quarter of McDonald’s total sales in 2015.

McDonald’s has a long-term plan to franchise 95 percent of its restaurants worldwide. More than 80 percent of its 36,000-plus restaurants are now operated by franchisees.

The company transferred ownership of about 470 company-owned restaurants to franchisees last year.

McDonald’s said it was seeking partners who would “enable localized decisions on growth initiatives” in China, Hong Kong and South Korea. In China particularly, the company is facing increasing competition from cheaper local rivals.

McDonald’s shares were little changed at $125.85 in premarket trading. The stock has risen about 29 percent in the last 12 months, outperforming the 18 percent rise in the S&P 500 restaurants Sub index.

REUTERS
Reporting by Subrat Patnaik in Bengaluru; Editing by Don Sebastian

A version of this also ran in Branding in Asia.

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