Fast food giant Jollibee Foods Corp. on Thursday ruled out bringing the recently-acquired South Korean Compose Coffee brand to the Philippines over the next few years, preferring instead on focusing on growing the brand’s market share in its home country.
“There is no plan to bring Compose to the Philippines,” said Jollibee CFO Richard Shin. The brand, he quickly added, will focus instead on its potential for growth in South Korea where it has an eight percent market share.
According to him, the broad plan is to focus on the Korean market over the medium term.
Compose Coffee, he said, is “quite lucrative and quite profitable. We think, purely from the cash that it generates, we probably would have a very quick payback” without elaborating the timeline this was seen to happen.
Nevertheless, he calculated that on a modest growth rate of 30 to 40 new franchisee store openings a month, the brand should “get to a pretty decent growth rate.”
“And with that, there’s no reason why in five to six years we should not be able to hit payback on this,” he said.
Shin said the brand is not looking for any more acquisitions as it plans to expand the flagship Jollibee brand globally as priority.
“We’re looking to make sure we get through the macro headwinds in China,” he said.
“China is going through some challenges and we’re not looking at a one- or two-year challenge. We think this could be over an extended number of years,” he said.
The China business is geared as capital light, “which means our franchisees need to have a good payback,” he said.
The plan is to grow fast in the Middle East, in Southeast Asia and in the US where strategic moves will help expand its presence there.
Jollibee Worldwide Pte. Ltd. earlier acquired a 70 percent stake of Compose Coffee Co. Ltd. for $340 million.
The balance is held by Titan Dining II LP (Titan Fund II) which is 90 percent-owned by Jollibee and Elevation Equity Partners Korea Limited with effective shareholdings of 5 percent and 25 percent, respectively.
Compose Coffee and its roasting facility JMCF Co. Ltd. were founded in Busan in 2014. It is one of South Korea’s leading coffee franchises in the fast-growing value coffee segment with over 2,600 stores as of June 2024.
