Jollibee Foods Corp. (PSE: JFC), Asia’s largest food service company, has entered into a business venture with award-winning Chef Rick Bayless to build a Mexican fast-casual restaurant business in the United States through its wholly-owned subsidiary Jollibee Foods Corp. (USA).
Chef Rick Bayless is the founder of Tortas Frontera restaurants, which feature hand-crafted tortas, fresh-made guacamoles, and hand-shaken margaritas. Most people who know Chef Bayless know him from his award-winning Chicago restaurants, long-running public television series and for winning the title of Bravo’s Top Chef Masters with his authentic Mexican cuisine. He has received numerous James Beard Awards, the most prestigious recognition in culinary art in the United States, including National Chef of the Year, Outstanding Restaurant of the Year (twice) and Humanitarian of the Year.
JFC Chairman Tony Tan Caktiong comments, “We at Jollibee Foods Corporation are very excited about this new partnership. We have great admiration for Chef Rick Bayless for being a top chef, for being a successful restaurateur and for his philanthropic endeavors. Together with his organization and brand Tortas Frontera, we will build a significant business in the large and fast-growing Mexican food category in the United States. This venture is very much in line with JFC’s mission: to serve great tasting food and spread the joy of eating to everyone!”
Mexican food is a rapidly-growing and very popular segment in the United States restaurant industry with estimated sales of $40-45 billion in 2017.
This partnership shall be formalized through an investment by JFC of $12.4 million in Tortas Frontera LLC, which owns the Tortas Frontera business founded by Chef Bayless, in consideration for 47% of the fully-diluted membership interests therein. The remaining 53% membership interests in Tortas Frontera shall be held by Chef Bayless and other shareholders. The transaction is subject to the fulfillment of agreed closing conditions.
Tortas Frontera, with headquarters in Chicago, Illinois, currently has four restaurants in the United States – three in Chicago O’Hare International Airport and one at The Arc in the University of Pennsylvania. The Tortas Frontera restaurants use high-quality ingredients with recipes capturing the vibrant flavors of Mexico. It offers mainly tortas (griddle-baked Mexican sandwiches with a variety of fillings such as beer-braised beef short ribs, chipotle chicken, garlicky shrimp and goat cheese) and molletes (warm, open-faced sandwiches). They also feature a guacamole bar with freshly made guacamole and the customer’s choice of toppings.
Chef Bayless, aside from winning numerous James Beard Awards, is the author of nine cookbooks, which have earned recognition as the Julia Child IACP Cookbook of the Year Award, James Beard International Cookbook of the Year and a position on the New York Times Bestseller list. The Government of Mexico bestowed on Chef Bayless the Mexican Order of the Aztec Eagle–the highest decoration bestowed on foreigners whose work has benefitted Mexico and its people. In 2016, he was the second recipient of the prestigious Julia Child Foundation Award, an honor given to “an individual who has made a profound and significant impact on the way America cooks, eats and drinks.” His highly rated public TV series, Mexico–One Plate at a Time, is broadcast coast-to-coast and has earned him multiple Daytime Emmy nominations.
Jollibee, with 4,279 stores worldwide as of June 30, 2018, has been growing strongly with system-wide sales increase of 23.2% in the first half of 2018 and net income growth of 16.1% in the same period versus year ago. Excluding the impact of the consolidation of Smashburger (85% owned by JFC effective April 17, 2018) sales grew by 18.7%. JFC’s North America business accounted for 14.6% of its global system wide sales, growing organically (without the acquisition of Smashburger) by 23.6%. JFC had a total of 436 stores in North America as of June 30, 2018 comprised of 349 Smashburger, 37 Jollibee US, 3 Jollibee Canada, 32 Red Ribbon, and 15 Chowking.
JFC operates the largest food service network in the Philippines. As at June 30, 2018, it was operating 2,957 restaurant outlets in the country: Jollibee brand 1,094, Chowking 542, Greenwich 277, Red Ribbon 434, Mang Inasal 514 and Burger King 96. Abroad, it was operating 1,322 stores: Yonghe King (China) 315, Hong Zhuang Yuan (China) 42, Dunkin’ Donuts (China) 15, Jollibee 213 (Vietnam 102, Brunei 16, Hong Kong 8, Singapore 5, Macau 1, United States 37, Canada 3, Saudi Arabia 13, UAE 12, Qatar 7, Kuwait 6, Bahrain 1, Oman 1, Italy 1), Red Ribbon in the US 32, Chowking 47 (US 15, UAE 21, Qatar 4, Oman 2, Kuwait 3, and Saudi Arabia 2), Highlands Coffee 269 (Vietnam 234, and Philippines 35), PHO24 32 (Vietnam 16, Indonesia 16), Hard Rock Cafe 8 (Vietnam 2, Hong Kong 3, and Macau 3); and, Smashburger 349. The JFC Group’s worldwide store network reached 4,279 stores.