Franchises News

April 24, 2008

Burger King Plans Rapid China Growth Over 3 Years


Burger King

Shanghai, April 21 - Burger King Holdings Inc, the world's No. 2 hamburger chain, is looking to open several hundred restaurants over the next three years in China, where it now has only 12, a senior executive said on Monday, as it seeks to narrow the gap with rival McDonald's Corp.

"If you look over a three year period, there should be several hundred restaurants," Asia Pacific President Peter Tan said in an interview in Shanghai, when asked about the company's target for new restaurants in China.

He added a note of caution, however, indicating that the ability to secure sites may pose constraints.

"How many hundred, I don't what the number is. It's definitely more than a hundred, but how much more will depend on the availability of sites."

Burger King, which entered China in June 2005, had been very cautious about growth, to make sure all the foundations would be in place before expanding aggressively in the country, mainly through franchises, he said.

McDonald's owns more than 900 restaurants in China and Yum Brands Inc operates more than 2,000 KFC stores in the country as western food chains vie for a bigger share of China's 200 billion yuan ($28 billion) a year fast-food market.

Burger King Chief Executive John Chidsey said last December that the company's nascent international business may catch up with its U.S. business in terms of revenue within five years, with plans to open 250 to 300 outlets across China during that period.

"China is a fast-growing market where 1.4 billion people are getting wealthier by the day," Tan said, adding Burger King would target teenagers and young adults between 18 and 30 in affluent cities along China's eastern coast.

About 90 percent of the new restaurants in China will be franchised and 10 percent self-owned, in line with Burger King's business model internationally, Tan added.

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