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McDonald's denies planning to withdraw from Taiwan market

McDonald's denies planning to withdraw from Taiwan market

Taipei, June 24 (CNA) McDonald's Co., the world's largest hamburger fast food chain, said Wednesday it will not pull out of the Taiwan market as reported, but the company did not address a report that implied it was planning to sell its directly operated stores.
In a statement released in the wake of a magazine story on the issue, McDonald's said one of the preliminary steps in its global invigoration plan that was initiated last month is a review of its operating models around the world to allow the introduction of a more efficient business model.
Against this backdrop, McDonald's said, it has decided to seek "developmental licensee" in Taiwan but will not withdraw from the market.
In the statement, McDonald's also said its commitment to high standards of food safety will not change with its new approach.
The Taipei-based Business Weekly on Wednesday cited Kenneth Chan, McDonald's chief executive in the greater China region, as saying in a closed-door meeting in Taipei on June 12 that McDonald's will hand over its operational rights to someone else.
McDonald's will adopt the franchise model in the Taiwan market, allowing new investors to decide how they will do business here, Chan was cited as saying in the weekly magazine.
That means closing the Taiwan subsidy, the Business Weekly said.
McDonald's has led the chain restaurant sector since it entered the Taiwan market 31 years ago, the report said, adding that Taiwan had once been one of the fast food giant's top 10 profit-generating markets.
Describing the operational change as the biggest earthquake to rock Taiwan's dining service industry this year, Business Weekly said the sale of nearly 350 McDonald's directly operated restaurants in Taiwan to franchisees will be a deal worth at least NT$10 billion (US$323 million) and will involve 16,000 employees.
What drove McDonald's to take that "drastic" decision was that the Taiwan market was no longer "sexy," the weekly said.
With McDonald's U.S. headquarters in financial straits, the enterprise needs to "auction off" its directly operated stores around the world to generate cash for the mother company, the weekly said.
Meanwhile, USA Today reported on Feb. 28 that McDonald's sales growth and earnings momentum began to slow in 2012 and continued to do so in 2013.
In 2014, McDonald's earnings per share declined 13 percent to US$4.82, the report said, adding that the tough market conditions facing the company were expected to continue at least through the first half of 2015. (By Elizabeth Hsu)


Updated : 2021-05-17 13:05 GMT+08:00