McDonald’s plans to open 400 more restaurants on the mainland in 2019 with Evergrande Group and Country Garden property projects as priority sites.
The fast food chain’s China operator CITIC Group has signed a cooperation agreement with the latter firms, aiming to increase its exposure to third- and fourth-tier Chinese cities.
A joint venture of CITIC Limited, CITIC Capital Holdings and The Carlyle Group paid US$2 billion for franchising rights to run McDonald’s businesses in China and Hong Kong for 20 years in 2017.
The new company said it will highlight the development in lower-tier Chinese cities. It expects to open restaurants in 300 Chinese cities over five years and have about 45% of the restaurants located in third- or fourth tier cities.
In CITIC’s 2018 annual report, the company disclosed that it received “other business” income of HK$100 billon in 2018, up 24% year on year, while net profit from this sector dropped 78% from a year ago to HK$2 billion.
The “other businesses” include McDonald’s businesses in China and Hong Kong, IT services, auto sales and publishing, among others.