Jollibee partners with Yoshinoya to grow Japanese chain's local footprint
MANILA, Philippines — Jollibee Foods Corp. is adding Yoshinoya, the Japanese food chain, under its growing list of local establishments.
In a disclosure early Tuesday to the stock exchange, the homegrown fast-food brand announced a “50/50 joint venture” with Yoshinoya International Philippines Inc. that operates Yoshinoya at home.
The partnership’s goal is to open 50 new local stores “in the long term,” up from only three currently.
The joint venture firm, which will have its own management, will have a capital stock of P130 million with profits equally shared by Jollibee and Yoshinoya. The transaction needs regulatory approvals to proceed.
In recent years, Jollibee has been aggressively expanding its business by either acquiring foreign food companies or their domestic franchises. But the company’s strategy has borne little fruit in the past 3 years when loss-making Smashburger in the US and Coffee Bean and Tea Leaf joined its growing portfolio.
Jollibee bought Smashburger in 2018, and Coffee Bean a year after, but both have yet to deliver profits to the company. Store closures because of the pandemic exacerbated the financial impact of these costly acquisitions, dragging Jollibee to a net loss of P11.5 billion last year.
Sought for comment, Luis Limlingan, managing director at Regina Capital Development Corp., a brokerage, said the JV with Yoshinoya may turn out to be different from Jollibee’s recent loss-incurring ventures.
“The company is one of the more established brands worldwide, which makes it easier to grow JFC’s store count,” he said in a Viber message. Yoshinoya Holdings Co. Ltd., the Japanese parent, reversed net losses in 2019 to book $6.54 million in net income as of February last year.
At the onset however, Limlingan echoed Jollibee’s assessment that Yoshinoya is unlikely to have material impact on the food chain’s sales that last year sank 27.8% year-on-year. But offering Japanese food “could positively affect the company’s delivery sales” which are booming because of consumers dependent on the service as the health crisis drags, he added.
“Yoshinoya’s food, particularly its signature Gyudon beef bowl holds very well for delivery,” Jollibee said. The firm invested P6.7 billion last year alone to improve its delivery services.
Apart from Yoshinoya, Jollibee also operates the local franchise of Burger King with 98 stores nationwide, as well as Panda Express and PHO 24, the Vietnamese food chain, with one each.
The announcement of the joint venture was made hours before trading opened. On Monday, shares at Jollibee went up to P179.50 apiece.
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