McDonald’s tipped to conclude search for Singapore and Malaysia franchise partner

McDonald’s has been tipped to have concluded its search for local franchise partners in Malaysia and Singapore. According to Bloomberg, the deal is estimated to be worth up to US$400 million.

According to an article on Reuters, the group which clinched the franchise rights is Saudi Arabian Reza Food Services. It currently exclusively owns and operates all McDonald’s restaurants in the Western and Southern regions of Saudi Arabia. When contacted by Marketing, McDonald’s declined to comment further on the details of the franchise as the process is still ongoing.

In a statement it said: We are making progress in the search for long-term strategic partners who are committed to helping accelerate growth and innovation with local relevance to our customers in Malaysia and Singapore.

Malaysian bank CIMB is said to be financing the deal.

The search for a franchise partner first started in July, with a spokesperson from McDonald’s confirming to Marketing on the move 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.”

Currently, the development licensee (DL) approach is a franchising model that McDonald’s has been using for more than 30 years and in more than 65 markets worldwide. Currently, Singapore and Malaysia’s immediate neighbours in Thailand, Indonesia and the Philippines are all development licensee models, as is South India and the entire Middle East.

Also the corporation has recently announced it is seeking DL partners for China, Korea and Hong Kong. China, Korea and Hong Kong collectively represent more than 2,800 restaurant locations, the majority of which are currently company-owned.