Shares in Restaurant Brands International (QSR) looked tastier today after it struck a joint venture with alternative asset manager group CPE to expand Burger King China stores and beef up demand.
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QSR, whose other brands include Tim Hortons and Popeyes, said that following the completion of the deal in the first quarter next year, CPE will own approximately 83% of Burger King China, with QSR holding the remainder.
Store Expansion
CPE will invest $350 million in Burger King China to drive the growth, including expanding the number of Burger King sites in China from 1,250 today to over 4,000 by 2035. It will also ramp up marketing, menu innovation and operations.
QSR said CPE will bring deep local market insights and operational excellence, as well as its “significant capital.”
QSR said that this new chapter would build on the strong momentum the Burger King China team has driven in recent months, with a “sharper focus on operations, elevated marketing, improving sales, and renewed guest engagement, creating a strong foundation for the brand’s next stage of growth.”
Back in February, QSR took over Burger King China from its local franchisee with a $158 million purchase. It came as Burger King demand in China weakened, as a result of dropping consumer confidence and more intense competition.
There is no doubting the appeal of fast food to the Chinese, however. China’s food service market is set to grow from $587.75 billion in 2025 to $766.50 billion in 2030.
Exciting Opportunity
QSR believes that the CPE deal will help it hit its previously disclosed 5%+ net restaurant growth target toward the end of its 2024–2028 outlook period. In addition, it said that the deal marks an important step in its plan to return to a more simplified, highly franchised business.
“China remains one of the most exciting long-term opportunities for Burger King globally. Our recent investments and this joint venture 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.”
Is QSR a Good Stock to Buy Now?
On TipRanks, QSR has a Moderate Buy consensus based on 8 Buy, 8 Hold and 1 Sell ratings. Its highest price target is $86. QSR stock’s consensus price target is $76.80, implying a 13.37% upside.
