McDonald's planning $540m sale of Singapore, Malaysia franchise rights, sources say

The logo of McDonald's seen in Los Angeles, US, on April 22.
The logo of McDonald's seen in Los Angeles, US, on April 22.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - McDonald's Corp is planning a sale of 20-year franchise rights in Singapore and Malaysia that could collectively fetch at least US$400 million (S$542.8 million), people with knowledge of the matter said.

Suitors for the fast-food operations in the two South-east 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 US$300 million in funding, they said.

McDonald's is seeking local franchise partners to run its restaurants in Malaysia and Singapore as it pursues an international turnaround plan put in place after chief executive officer Steve Easterbrook took over last year. The Big Mac-maker, which has a US$112 billion market value, is revamping its ownership models throughout Asia, including plans to sell operations in China, Hong Kong and South Korea.

McDonald's has adopted a "development licensee model" for the two markets, a Singapore-based spokesman for the company said in an e-mailed response to Bloomberg queries.

 

It is negotiating with candidates "who are committed to helping accelerate growth and innovation in Malaysia and Singapore", she said.

Unlike in its other major markets - including the US - most McDonald's outlets in Asia are company-owned. The chain aims eventually to have 95 per cent of its restaurants in the region under local ownership, it said in March.

McDonald's currently has more than 120 restaurants with around 9,000 employees in Singapore, according to its local website. In Malaysia, the chain runs more than 250 restaurants, its website shows.