Fast-Food Chains Cross Borders as McDonald’s Plans 1,000 New Outlets in China
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American fast-food brands and Chinese restaurant chains are accelerating cross-border expansion, trading burgers and bubble tea across both markets despite trade friction.
McDonald’s plans to open 1,000 new Chinese restaurants this year on its way to a target of 10,000 locations by 2028. Burger King expects to triple its Chinese footprint to 4,000 stores by 2035, while Wendy’s aims to open 1,000 restaurants in the country over the next decade.
Church’s Texas Chicken entered the market last month with an opening in Shanghai that drew long queues in the rain, with plans for at least 600 outlets nationwide. At the same time, Chinese beverage and fast-food operators are pushing into North America to build alternative revenue streams away from intense domestic discounting.
American giants target lower-tier Chinese cities
China remains the largest market for Yum China’s KFC, which operates roughly 13,000 outlets in the country compared with 3,750 in the United States. Having entered Beijing in 1987, followed by McDonald’s and Pizza Hut in 1990, western quick-service brands are now looking beyond saturated top-tier cities.
Growth is shifting into smaller, inland municipalities where lower operational costs and rising disposable incomes support store additions. Even with high consumer familiarity, foreign operators increasingly rely on regional joint ventures to manage site selection and financial commitments. Starbucks restructured its mainland operations earlier this year by selling a 60 per cent stake to Boyu Capital following several years of softer store traffic.
Menu adjustments remain essential for western chains looking to protect customer volumes. KFC menus across mainland outlets feature localized breakfast congee and egg tarts alongside fried chicken, balancing core imports with domestic dining habits.
Chinese operators push abroad to escape price wars
Sluggish domestic consumer spending and a property slump have squeezed margins across China’s 16 million food and beverage outlets, where the average operational lifespan was projected to drop to 15 months last year. After expanding across Southeast Asia, Chinese brands are taking their supply chains directly into the United States.
“Church’s Texas Chicken entered the market last month with an opening in Shanghai that drew long queues in the rain, with plans for at least 600 outlets nationwide.”
Drink and ice cream giant Mixue, which operates more than 53,000 stores globally, entered the US market in December with three locations, including a store in New York’s Herald Square. The chain has outlined plans for at least 24 additional sites across four American states.
Tea and coffee specialists are scaling alongside them. Heytea now runs 40 US branches, while Luckin Coffee has established 20 locations in New York after overtaking Starbucks by store count in China.
Value positioning and operational friction
Chinese entrants rely heavily on aggressive price points to gain market share against entrenched western competitors. At a Mixue store in Hollywood, a medium matcha latte sells for $6.83, undercutting nearby Starbucks pricing by nearly a dollar. Fast-food operator Wallace, which runs over 20,000 hamburger and fried chicken restaurants in China, opened its second California restaurant selling three chicken sandwiches for $10.
For landlords and retail operators, the influx provides active leasing demand in suburban strip centers and urban transport hubs. However, maintaining aggressive pricing abroad introduces margin pressure, particularly if supply chains rely on imported ingredients exposed to tariff adjustments.
Data governance and consumer perception present additional operational hurdles for Chinese operators abroad. Wallace does not highlight its Fujian headquarters on its American web pages, reflecting the brand sensitivity required as trade ties face political scrutiny.
Scale tests across both retail markets
The cross-border push represents a clear divergence in operational objectives. Western chains need China’s massive consumer base to meet long-term unit growth targets, while Chinese chains need the high-margin dollar revenues of the US market, which accounts for one-third of global restaurant industry sales.
Luckin Coffee chief executive Jinyi Guo told investors the American market represents an important long-term target that the group will pursue with disciplined capital allocation. Industry attention now turns to Mixue’s next round of store openings across the US West Coast and McDonald’s pace of store rollouts across inland Chinese provinces through the end of the financial year.
Questions & Answers
Q.Which American fast-food brands are planning significant expansion in China?
Which American fast-food brands are planning significant expansion in China?
McDonald's plans to open 1,000 new restaurants this year towards a 10,000-location target by 2028. Burger King expects to triple its footprint to 4,000 stores by 2035, and Wendy's aims for 1,000 restaurants over the next decade.
Q.Why are Chinese food and beverage operators expanding into North America?
Why are Chinese food and beverage operators expanding into North America?
They are looking to build alternative revenue streams away from intense domestic discounting. Sluggish consumer spending and a property slump in China have squeezed their margins.
Q.What strategy are Western chains using to succeed in the Chinese market beyond top-tier cities?
What strategy are Western chains using to succeed in the Chinese market beyond top-tier cities?
They are targeting smaller, inland municipalities where operational costs are lower and disposable incomes are rising. Foreign operators increasingly rely on regional joint ventures for site selection and financial commitments.
Q.How are Chinese operators competing in the US market regarding pricing?
How are Chinese operators competing in the US market regarding pricing?
They rely heavily on aggressive price points to gain market share. For example, a Mixue matcha latte undercuts nearby Starbucks pricing, and Wallace sells three chicken sandwiches for $10.
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