PizzaExpress has announced the acquisition of its franchise partner in China, PizzaExpress (Hong Kong) Limited.
The first PizzaExpress franchise opened in Hong Kong in 2001 and, since then, the franchised estate has grown to 13 in Hong Kong, 13 in Shanghai and 1 in Shenzhen. The transaction will allow PizzaExpress take full control of the 27 franchise restaurants, in addition to the restaurant the company already owns in Beijing.
China a strategic priority
The acquisition is consistent with PizzaExpress’ strategy to grow its estate of wholly owned restaurants in its core markets, where it has proven its model and there is a long-term growth potential.
China has been a strategic priority for the group for some time. The Chinese food service industry was valued at £300 billion in 2013 and is forecast to grow at 7% a year between now and 2017. At the same time, there is a growing appetite among Chinese consumers for high quality casual dining restaurants offering Western cuisine which represents a significant opportunity for PizzaExpress.
Karen Zhao has been appointed CEO of PizzaExpress’ Chinese operations and brings significant experience in managing consumer-facing business in China. The franchise partner will continue to work with PizzaExpress for 12 months after the transaction.
Accelerating opening programme
Following the transaction, PizzaExpress expects to open between 15 and 20 sites over the next 12 months, following which the opening programme will be accelerated further. It anticipates that its business in China can become a similar size to its UK operations within 10 years.
Today’s announcement follows the acquisition of the 7 franchise restaurants in the United Arab Emirates in May 2015. PizzaExpress was acquired by Hony Capital, a leading Chinese private equity firm in July 2014. This transaction was the largest in the European restaurant sector in the past five years.
Richard Hodgson, CEO of PizzaExpress, commented:
“China represents a huge opportunity for PizzaExpress. Through our franchise partner, we have been operating successfully there for fourteen years and have built an exciting platform in the key cities of Hong Kong, Shanghai and Beijing. Today’s acquisition is an exciting development and will enable us to accelerate our growth in China. With a model that is proven in the local market and Hony’s expertise in the region, we have the opportunity for China to become as important to us as the UK within ten years.”
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