BEIJING—McDonald's Corp. is aiming to sell its stores in Taiwan
to a franchise operator and expand its franchise business in China,
a spokesman said Thursday, as the company tries to turn around its
fortunes in Asia and cut costs globally.
McDonald's uses franchisees and licensees in its more mature
markets, like the U.S. But elsewhere it has largely relied on a
more costly model of operating its own stores to oversee their
quality and growth.
The Oak Brook, Ill., company's new chief executive, Steve
Easterbrook, has been overhauling its U.S. business, including by
selling more restaurants to franchises and eliminating management
layers. Now he's turning to the international market in an effort
to boost sales and profits.
Mr. Easterbrook has said global franchise ownership, including
the U.S., will expand to 90% from 81% currently, and that the
company will sell 3,500 restaurants to franchisees by 2018.
McDonald's is looking for a franchise candidate to run its 413
Taiwan stores, which it has operated itself since entering the
market more than three decades ago, the spokesman said.
McDonald's operated all its stores in China for more than two
decades, until 2008 when it turned to franchising. By the end of
last year, around 20% of its 2,000-plus stores in China were
franchised, and the company plans to continue increasing the
licensees and franchisees, the spokesman said. "Franchising is
about growth and economic efficiency," he said.
McDonald's sales in Asia tumbled after problems with one of its
suppliers last year affected its available menu items and crippled
sales. Sales at stores open more than a year Japan, where
McDonald's has also faced f ood contamination scares, and China
declined 32.3% and 4.8%, respectively, in the first quarter, Kevin
Ozan, McDonald's chief financial officer, said in an April earnings
call. The company says it is still aiming to pull back consumers
that it lost last year.
Executives also said previously that McDonald's would close 700
underperforming stores primarily in Japan, China and the U.S. Mr.
Easterbrook said the company expects China sales to return to "a
normalized level of performance by midyear."
Write to Laurie Burkitt at laurie.burkitt@wsj.com
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