Business

McDonald's to Sell Taiwan Outlets in Favor of Franchising

By | Jun 26, 2015 08:02 AM EDT
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McDonald's Taiwan

McDonald's hopes that the franchisees, who will take charge of operations, will help bring back loyal customers and improve the sales of its products in the Taiwan market.(Photo : Photo by Chris McGrath/Getty Images)

McDonald's announced on Wednesday that it will sell all of its outlets in Taiwan. The fast-food chain noted that the move is meant to streamline its overseas operation and McDonald's has no intention of leaving the Taiwan market.

On Thursday, McDonald's issued an official statement explaining that the company is looking for a franchisee, who is willing to operate all of its 413 outlets in Taiwan, Business Insider reported.

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Currently, McDonald's is directly operating all of its Taiwan branches, but it is now willing to take a business partner who will manage the operations. This is why the US-based fast-food giant is reportedly looking for a "developmental licensee" who will handle the Taiwan market.

The Taiwan News reported that McDonald's was once considered Taiwan as once of its top earners, however, numerous competitors, both local and foreign, have significantly lowered the company's earnings in the country. McDonald's hopes that the franchisees can help bring back its once loyal customers and improve the sales of its products in the Taiwan market.

The sale of McDonald's 413 outlets in Taiwan will also mean a cash inflow of $323 million (around NT$10 billion) to the U.S. company. The BBC reported that if the deal pushes through, it would mean the end of 31 years of McDonald's direct control of the Taiwanese outlet stores. Around 20,000 crew and staff will be affected.

McDonald's reported last April that it had shut down around 350 of its outlets around the world. In the United States, the number of McDonald's outlets have reduced this year.

The fast-food giant is quickly adopting the idea of franchising its outlets rather than directly operating them. CEO Steve Broker announced this new strategy last month. He explained that the company is now going to sell its directly operated stores to franchisees rather than shut them down. This will help keep company cut costs, while keeping the outlets open.

Rumors and allegations of unsafe foods are believed to have also played a contributing factor in McDonald's revenue decline in the Asian market.

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