McDonald’s sells Singapore, Malaysian franchise to Saudi group
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McDonald’s said on Friday it had sold the franchise rights for its restaurants in Singapore and Malaysia to Saudi Arabia’s Lionhorn Pte Ltd as part of a plan to move away from direct ownership in Asia.
The fast-food chain said it transferred its ownership interest in 390 restaurants, more than 80 per cent of which were company-owned, on Dec. 1 to Lionhorn.
Lionhorn is led by Sheik Fahd and Abdulrahman Alireza, who are franchisees for nearly 100 McDonald’s restaurants in the western and southern regions of Saudi Arabia.
McDonald’s did not disclose the financial terms of the deal.
Reuters reported in October that McDonald’s was nearing a deal worth up to $400 million to franchise the outlets to Reza group, which also owns and operates McDonald’s outlets in the western and southern regions of Saudi Arabia.
The Lionhorn deal is in line with McDonald’s plans to bring in partners in Asia as it switches to a less capital-intensive franchise model.
The company said it has now franchised about 1,300 outlets as a part of its target to become 95 per cent franchised by the end of 2018.
Questions & Answers
Q.Why did McDonald's sell its franchise rights in Singapore and Malaysia?
Why did McDonald's sell its franchise rights in Singapore and Malaysia?
McDonald's sold these rights as part of a strategic plan to move away from direct ownership in Asia. The company is transitioning to a less capital-intensive franchise model across the region, aiming for 95% franchising by the end of 2018.
Q.Which company acquired the franchise rights for McDonald's in Singapore and Malaysia?
Which company acquired the franchise rights for McDonald's in Singapore and Malaysia?
Saudi Arabia’s Lionhorn Pte Ltd acquired the franchise rights. This group is led by Sheik Fahd and Abdulrahman Alireza, who already operate nearly 100 McDonald’s restaurants in Saudi Arabia.
Q.When did the transfer of ownership for these restaurants take place?
When did the transfer of ownership for these restaurants take place?
The transfer of ownership interest in the 390 restaurants occurred on December 1. Over 80 per cent of these outlets were previously company-owned by McDonald's before the sale to Lionhorn.
Q.How many McDonald's outlets were included in this franchise deal?
How many McDonald's outlets were included in this franchise deal?
The deal included 390 McDonald’s restaurants across Singapore and Malaysia. This acquisition forms part of McDonald’s broader strategy to franchise approximately 1,300 outlets globally.
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