RBI Terminates its China Partner?

Is this an April Fools Joke?

Does RBI think they will find someone else better to take over a franchise with less than attractive financial performance?

I have looked at the BK China financials in the past on behalf of several interested Funds and without betraying any confidence I can say that they passed on the opportunity. The financial performance was underwhelming.

While scale is critical to superior financial performance in the QSR industry, BK China had more than enough scale. They just did not have a strong economic store model for secondary cities.

Now with 1500 stores and limited operating cash to grow further, the franchisee is put in breach?

If RBI is so bullish about the China market, let's see them buy the business and run it better. Are they willing to risk their own capital like YUM, McDonald's, and Starbucks have done?

Sorry to say but IMO and with the benefit of considerable insight, BK China should be closing stores, getting leaner, and trying to survive by focusing on their cash flow not growth.

Tim's China has the same problem that is exacerbated by ugly price wars in the sector. Lots of brands offering coffee for 10 RMB, some like KFC even throw in a snack for that price.

RBI wanted to tell a good China story to support their global growth plans. They need to get real and find other parts of the world to make up for a likely downsizing in China.

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