Jollibee wholly devours Tim Ho Wan with partners' stake buyout

Jollibee Foods Corporation (JFC) is buying the shares of the remaining partners in the fund that owns the Tim Ho Wan brand. Its wholly-owned subsidiary Jollibee Worldwide, which already owns an 85% participating interest in the fund will pay SG$71.56 million to purchase the remaining 15% interests of other investors in Titan Dining, the company said in a filing on the Philippines Stock Exchange.

JFC invested SG$45 million in Titan in May 2018 to own a 45% participating interest in Titan Dining which was the master franchisee of Tim Ho Wan in the Asia Pacific region. JFC said previously that by investing in the fund, it would have the opportunity to acquire substantial ownership of Tim Ho Wan's master franchise in Asia Pacific through a purchase mechanism provided for in the investment agreement.

In October 2019, JFC said that Jollibee Worldwide's capital commitment to Titan increased from SG$45 million to SG$120 million, its participating interest increased to 60% and the fund size of Titan increased from SG$100 million to SG$200 million. Titan Dining also expanded its assets by acquiring at about this time the Tim Ho Wan brand and trademarks. Last October, JFC's participating interest in the Titan fund increased further from 60% to 85% after Jollibee Worldwide purchased the 25% participating interest of another investor in the fund for a total consideration of SG$36.3 million.

Meanwhile, last September, JFC through a joint venture with Titan Dining opened a Tim Ho Wan restaurant in Shanghai, the first THW outlet in Mainland China. The joint venture now has three THW outlets in Shanghai with the latest opened only last month. According to JFC, it plans to aggressively expand Tim Ho Wan in Mainland China with a a target of reaching 100 restaurant outlets within the next four years.

Tim Ho Wan operates a total of 53 outlets in Asia, mostly franchised stores with the largest concentration in Singapore, Taiwan, the Philippines and Hong Kong. Aside from Tim Ho Wan, other brands under JFC serving Chinese cuisine include Chowking, Yonghe King, Hong Zhuang Yuan, Panda Express.

This news comes about two weeks after JFC formed a joint venture company with Beeworks Investment to own and operate Jollibee stores in West Malaysia. The joint venture company aims to open at least 120 stores within 10 years, beginning next year. Under the agreement, the parties will establish a company in Malaysia which wil be owned by 30% by Golden Plate, a subsidiary of JFC, and 70% by Beeworks Investment.

Both parties have committed to initially invest US$8 million to the joint venture, of which up to US$2.4 milion will be contributed by Golden Plate in proportion to its ownership in the business. The joint venture company will have the exclusive licence rights to develop the Jollibee brand in West Malaysia. Beeworks Investment is majority-owned by Patrick Chong who is a franchisee for Jollibee East Malaysia which covers Kota Kinabalu.

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