Jollibee forms unit to oversee regional operations

Fastfood giant Jollibee Foods Corp. (JFC) has formed a new subsidiary, Jollibee Worldwide Pte., to serve as the group’s regional operating headquarters (ROHQ) in the Philippines.

In a disclosure to the Philippine Stock Exchange, JFC said the new subsidiary has secured a license from the Securities and Exchange Commission to operate as an ROHQ and provide services to its foreign and domestic business operations.

JFC chairman and chief executive officer Tony Tan Caktiong said the new legal entity, which will formally start operations early next year, will house the Jollibee Group’s shared services.

"The license to operate a regional operating headquarters is a recognition that our business is now truly a multinational enterprise. As importantly, the creation of shared services signifies our conviction that our support services can help make our businesses more efficient and profitable and that these support services are sources of competitive advantage," Tan Caktiong said.

Tan Caktiong said the group will invest P110 million for upgrading its building and work facilities for its shared services.

He said the move is part of a broader and long-term corporate strategy and organization transformation. "Our first priority is to grow the business by growing same-store sales, expanding our store network, entering new geographies and acquiring new businesses. We also need to increase our productivity and this will come mainly from increasing the size of our businesses while keeping the size of our overheads stable," Tan Caktiong said.

The ROHQ license grants investment incentives to service operations for multinational companies such as accounting, human resources, information tehcnology and other related functions.

Tan Caktiong said the new subsidiary will employ about 800 people representing several support functions starting with accounting services and employee services.

In preparation for its shared services, the Jollibee Group has invested P250 million over the past two years in upgrading and standardizing its information technology using the Oracle system as its enterprise platform.

As of Nov. 30, 2005, JFC had a total of 1,243 stores: 521 Jollibee, 321 Chowking, 235 Greenwich, 131 Red Ribbon and 335 Delifrance. It also operates 147 stores abroad, including 95 Yonghe King stores in the People’s Republic of China, for a total network of 1,390 stores in nine countries worldwide.

The Jollibee Group has operations in nine countries including the United States, the People’s Republic of China, Indonesia, Vietnam and Hong Kong and has plans to further expand its business abroad and in the Philippines through the expansion of store networks of its current brands and through acquisition of new businesses.