Jollibee sets sights on 30 US cities

MANILA, Philippines —  Homegrown fast-food giant Jollibee Foods Corp. (JFC) has set its sights on 30 cities in the United States for new store expansion of flagship Jollibee brand.

In a press briefing, JFC CFO Richard Shin said  the company has identified the 30 top cities in the US for fried chicken using data that other major quick-service restaurants (QSR) such as KFC and Popeyes use as well.

“The 30 cities that we’ve identified, we’ve also identify where we have stores and where we have white space. That process will mean that we’ll take that as priority for the new stores,” Shin said.

“So we’ll start to fill in those 30 locations because they had the highest disposable income as a percentage spent to our segment. So they eat out the QSR space. Having said that, I don’t know where we can end up in terms of number of states. But that process of 30 cities and sometimes you have multiple cities in a state...I think is probably the way we want to go,” he said.

Jollibee currently has 100 stores in North America, with branches in 14 states in the US.

Its North America network is composed of 72 stores in the US and 28 stores in Canada, all of which are company-owned.

“So that’s our footprint today. We are in 14 states.  We’re about 40 percent indexed in the state of California, which by the way is a very important state for the QSR segment,” Shin said.

“From 14 states, the opportunity really is to expand in other states that we currently are not in,” he said.

The group earlier said it is looking to have 500 Jollibee stores in North America in the next five to seven years as part of its aggressive expansion plan.

Shin said achieving the target would really depend on the group’s ability to shift from being great operators to being equally great franchisors.

JFC had previously expressed its intent to rapidly expand its global footprint through franchising.

“As I mentioned, we’re 100-percent company owned. If you can make that shift and the box economics at a unit level is more superior than a KFC or Popeyes, then franchisees who are in those 30 big cities, clusters as we call them, will look at us as a viable option, an alternative.  If they do that, then that 500 (stores) number can really explode,” Shin said.

“So it’s really up to us to do a couple of things right. Make sure the menu is relevant for American consumers. Secondly, make sure that the box economics, including the capex to build a store, average daily sales and so forth, are stronger than the competition,” he said.

Shin said store expansion would also be supplemented with a strong delivery and off premise.

“Because we may not have stores everywhere, but if your ability to deliver to get to consumers exist, that’s an expansion as well,” he said.

As a group, JFC is one of the largest Asian food service companies with 18 brands in 33 countries.

As of end-February, its store network stood at 6,902 stores worldwide, consisting of 3,336 in the Philippines and 3,566 abroad.

On Wednesday, JFC said in a stock exchange filing that it has made a capital commitment of S$90 million in Titan Dining II LP through subsidiary Jollibee Worldwide Pte. Ltd.

“We decided to also invest in Titan Fund II because it will bring to life in this part of the world a brand that we currently own that is not in this part of the world. A specific brand has been identified, but I’d rather wait until we properly disclose which brand that is and which geography that we are investing in,” Shin said.