According to the Bloomberg site, McDonald’s Corp. is planning a sale of 20-year franchise rights in Malaysia and Singapore that could collectively fetch at least US$400 million as a part of move away from direct ownership, people with knowledge of the matter said.
Singapore has more than 120 McDonald’s restaurants with around 9,000 employees. While Malaysia chain has more than 250 restaurants spread all over the country.
In a statement on Tuesday (26 July), a spokesman for McDonald said, “McDonald’s has taken the decision to adopt a development licensee model for the Malaysia and Singapore markets in order to enable focused investment in the brand and speed up growth in these key Asian markets,” McDonald’s said in a statement on Tuesday (Jul 26).
Suitors for the fast-food operations in the two Southeast Asian markets have begun sounding out banks for financing, said the people, who asked not to be identified because the information is private. A potential bidder is in talks with lenders for as much as $300 million in funding, they said as cited by Bloomberg.
An international turnaround plan was put in place after Chief Executive Officer Steve Easterbrook took over last year, therefore the company is looking for local franchise partners to run its restaurants in Singapore and Malaysia.
A Singapore-based spokeswoman for the company said in an e-mail in response to Bloomberg queries that McDonald’s has adopted a “development licensee model” for the two markets. “It is negotiating with candidates who are committed to helping accelerate growth and innovation in Malaysia and Singapore,” she said.
In March, the company said that the chain aims to have 95 percent of its restaurants in the region under local ownership. Because unlike in its major markets, including the US, most McDonald’s outlets in Asia are company owned.