It was in 2019 when Jollibee Foods Corporation (JFC), the company that runs the same-named fast-food chain that is the first name in the game for Filipinos around the world, took some giant steps to establish itself as a multinational contender in fast food. This was embodied in two key American franchise acquisitions, that of The Coffee Bean & Tea Leaf from California and Smashburger from Colorado. Plans to have the two new subsidiary chains (the former already having branches in the Philippines) begin adding their weight to JFC’s franchise output by 2020 were ruined by the COVID-19 pandemic again messing things up. But Jollibee bosses remain confident about things.
The Philippine Star reports that Jollibee Foods Corporation now project that their two newest foreign brands, which cost the Philippine fast-food company quite the sum, will still make up these values without much delay by next year, 2021. This was the assured statement of Jollibee chain founder and JFC Chairman Tony Tan Caktiong during the company’s online-hosted annual stockholder’s meeting. Tan Caktiong particularly spoke highly of The Coffee Bean & Tea Leaf, in that it can turn things around as early as Q4 of 2020 and start gaining profit afterward.
Similar forecasts were given of Smashburger, which had recently seen some slimming down in terms of market presence even before the mass closure of businesses due to COVID-19. Some 350 stores were shut down for underperformance in sales by its formerly independent leadership before its complete acquisition by Jollibee Foods, which initially had a 40% stake in the chain since 2015. But since it does not have Philippine restaurants yet, the focus goes more to Coffee Bean, which Tan Caktiong notes “can resonate and be loved by consumers globally beginning in Asia to the US.”
Jollibee Foods must hope these projections can pan out and the global health situation cooperates by improving as 2020 winds down. The company expended big sums for both acquisitions: $445 million for Smashburger which was fully owned by 2018 and a 2019 buyout of the Coffee Bean & Tea Leaf for $350 million. The emergence of the novel coronavirus from China in late 2019 became a major complication on top of slower profits that year, and for 2020 a greater loss is inevitable. JFC has responded locally by spending P7 billion on digital service improvements, focusing on delivery service so that Jollibee loyalists can eat by takeout even if dining-in gets suspended due to COVID-19.
Image courtesy of Bloomberg