Burger King in expansion partnership

Restaurant Brands International Inc (RBI) announced on Monday a joint venture with Chinese investment firm CPE to accelerate Burger King's growth in China despite fierce competition in the sector.

The deal aims to expand the brand's presence from around 1,250 restaurants today to more than 4,000 by 2035. RBI's portfolio includes four global quick-service restaurant brands: Burger King, Tim Hortons, Popeyes and Firehouse Subs.

Under the agreement, CPE will invest $350 million in new primary capital into the JV to support restaurant expansion, marketing, menu innovation, and operations across China.

CPE, with a strong track record of scaling up consumer brands such as Mixue Group, Laopu Gold and Pop Mart, will hold an 83 percent stake in the JV. RBI will retain 17 percent and a seat on its board of directors.

"China remains one of the most exciting long-term opportunities for Burger King globally. Our recent investments and this JV underscore our confidence in the Chinese market," said Joshua Kobza, CEO of RBI.

"Together, we can unlock the business's full potential by combining our iconic brand and global scale with CPE's local market and operational expertise."

Mark Mao, managing director of CPE, said: "Our investment reflects our confidence in Burger King's long-term potential in China. Leveraging our commitment and deep understanding of the Chinese consumer, we aim to bring Burger King's flame-grilled burgers to even more guests across the country."

The partnership will also see a wholly owned affiliate of Burger King China sign a 20-year master development agreement, granting it exclusive rights to develop and operate the Burger King brand in the Chinese market.

RBI said the deal will help double Burger King China's store count within five years and position the company to meet its broader goal of achieving more than 5 percent net restaurant growth toward the end of its 2024-28 outlook period.

Following the transaction, RBI will begin recognizing royalties from the Burger King China business in its international segment, with a gradual step-up to the full historical royalty rate over time.

The transaction is expected to close in the first quarter of 2026, pending customary regulatory approvals.

Jason Yu, general manager of CTR Market Research, said, "As a globally renowned brand, Burger King faces intense competition in China but still maintains considerable brand recognition and long-term value."

Leveraging its local resources and operational expertise, CPE can support Burger King China in accelerating localization, enhancing supply chain efficiency, expanding its store network — particularly in second- and third-tier cities — and strengthening digital marketing efforts, thereby unlocking its full growth potential, he added.

Burger King has faced strong pressure, both from international as well as domestic peers, amid fast expansion of the store network and market penetration.

According to the Mintel, a marketing research unit, fast-food brand Wallace, which started its expansion from lower-tier cities, surpassed the milestone of 20,000 stores in 2023 and has since steadily advanced its store footprint.

Meanwhile, brands such as KFC, McDonald's, and Pizza Hut accelerated their store expansion pace in 2024, with store count growth rates exceeding 10 percent, according to Mintel.

The guochao, or China-chic trend, is sweeping across the consumer market with unstoppable momentum, with the enthusiasm shown by the younger generation for homegrown cultural elements becoming a major force reshaping consumption trends, said Roolee Lu, director of food and drink, and food services, Mintel China.

As a result, the Western-style fast-food industry faces potential risks of losing younger customers. In daily dating scenarios — where Western fast food has traditionally held an advantage — preference for Western food among 18- to 24-year-olds is now on par with that for Chinese food, Lu said.