The Philippine-listed company disclosed the operations were discontinued on Tuesday (October 31) by 12 Hotpot (Shanghai) Food and Beverage Management Co Ltd ― the operating company of 16 stores of the restaurant brand in the Shanghai area.
12 Hotpot Shanghai is the subsidiary of JFC’s 48 per cent-owned joint venture company the WJ Investments Ltd, which started in August 22, 2012 when JFC’s wholly-owned subsidiaries Jollibee Worldwide Pte Ltd (JWPL), and Golden Plate Pte Ltd (GPPL) entered into an agreement with Hoppime Ltd, a subsidiary of Wowprime Corp of Taiwan (Wowprime) and some key executives of Wowprime, to establish WJ Investments to own and operate 12 Hotpot brand in mainland China, Hong Kong, and Macau.
With the discontinuation of the 12 Hotpot business in China, the operating company 12 Hotpot (Shanghai) shall be dissolved and liquidated, after which JFC’s 48 per cent-owned JV firm will follow suit.
“JFC will focus on building its larger and fast-growing businesses in China and other parts of the world,” the company said in its statement, commenting on its reasons for the closing down its hotpot business.
Recalling its financial results of the second period in 2016, while profit grew significantly versus prior years, JFC noted its foreign business sales in the same period increased by 24.3 per cent led by Southeast Asia (ex-Philippines) with growth of 42 per cent, North America 32.5 per cent, and Middle East 31 per cent.
“All these regions are profitable and had significantly improved their profitability versus prior years. JFC will continue to drive strong profitable growth of these businesses, along with the Philippines in the years ahead,” JFC added.
The 12 Hotpot business has not been consolidated in JFC’s financial statements and store count as it owns less than majority of the joint venture.
JFC divested its share in the San Ping Wang business on December 30, 2016 by selling its shares to its partner in Guangxi San Ping Wang Food and Beverage Management Company Limited in order to focus on building its larger businesses in China. At the time of JFC’s divestment, San Ping Wang already had 72 stores and was profitable.
JFC also divested its business of producing and selling food products for third party institutions in China on November 23, 2016 through an asset for equity swap giving JFC 100 per cent ownership of Happy Bee Foods Processing plant in Anhui Province. This move was intended to focus on supporting Yonghe King’s growth by further improving food quality, strengthening food safety and accelerating product innovations.
As of Septemmber 30, 2017, the JFC Group’s worldwide store network reached 3,644 stores. It also has a 40 per cent interest in Smashburger with 355 outlets, mostly in the US.
JFC reported it had the following businesses in China, such as Yonghe King, its largest business with 305 stores, Hong Zhuang Yuan 44 stores; and Dunkin’ Donuts with 18 stores, for a total of 367 stores.
The Tony Tan Caktiong-led company has also been operating Happy Bee Foods Processing co to supply the products to its restaurants.
In the Philippines, JFC remains to be the largest food service network. As at September 30, 2017, it was operating 2,756 restaurant outlets in the country, namely Jollibee brand 1,023, Chowking 510, Greenwhich 262, Red Ribbon 411, Mang Inasal 471, and Burger King 79.
Overseas, JFC was operating 888 stores, namely Yonghe King (China) 305, Hong Zhuang Yuan (China) 44, Dunkin’ Donuts (China) 18, Jollibee 186 (US 36, Vietnam 93, Brunei 15, Saudi Arabia 11, UAE 9, Qatar 6, Singapore 5, kuwait 4, Hong Kong 4, Bahrain 1, Canada 1 and Oman 1), Red Ribbon in the US 33, Chowking 44 (US 15, UAE 19, Qatar 3, Oman 3, Kuwait 3, and Saudi Arabia 1), Highlands Coffee 219 (Vietnam 193, Philippines 26), Pho 24 31 (Vietnam 15, Indonesia 14, Korea 1, and Australia 1), and Hard Rock Cafe 8 (Vietnam 2, Hong Kong 3, Macau 3).