McDonald’s cleared to enter RP retail mart

McDonald’s Corp. (McDonald’s) has been pre-qualified by the Board of Investments (BOI) managements committee to engage in retail trade under the Retail Trade Liberalization Law.

This would finally allow the US-based McDonald’s Corp. to take over the operations of the local McDonald’s franchise currently held by McGeorge Food Industries, Inc.

McDonald’s, through its affiliate-holding company McDonald’s Restaurant Operations, Inc., will acquire a 40-percent equity in the existing realty company Golden Arches Development Corp. (GADC).

The $1.5-million receivables of McDonald’s Corp. will be converted into equity of McDonald’s Restaurant in GADC.

GADC will then merge with McGeorge Food Industries, Inc. (which currently holds the local McDonald’s franchise), to create a retail trade corporation.

The local partner will invest another $1 million into the merged corporation. The surviving entity would be GADC, which will have to revise its incorporation papers with the Securities and Exchange Commission (SEC) and convert from a realty company to a retail trade corporation.

McDonald’s, with a net worth of P9.204 billion, is a worldwide retailer with 28,700 stores.

McDonald’s pre-qualification to engage in local retail trade, the BOI said, is in reciprocity to US retail law.

The United States Department of Commerce has certified that retailing in the US is open to foreigners consistent with its commitment under the World Trade Organization (WTO) General Agreement on Tariff and Services.

McDonald’s is only the second foreign entity to be allowed to engage in retail trade under the Retail Trade Liberalization law. – Marianne Go