Private equity firm FountainVest Partners is considering the sale of its Chinese franchise operator, CFB Group, which operates the Papa John's and Dairy Queen (DQ) brands in Greater China. This move represents another case of an international restaurant brand restructuring its China operations, following similar actions by Starbucks and Burger King.
According to a Bloomberg report, FountainVest is in discussions with financial advisors regarding a potential sale of CFB Group. The transaction could value CFB at approximately $500 million. The sources requested anonymity as the discussions are private.
The report cited informed sources stating that considerations are still in the early stages, and a formal sale process may not commence until later this year. FountainVest could also decide to retain the asset for the time being. FountainVest did not respond to requests for comment.
This development continues a trend of international restaurant brands reassessing their China businesses. Starbucks has agreed to sell its China operations to private equity firm Boyu Capital, while Restaurant Brands International is also selling control of Burger King China to buyout firm CPE.
CFB Group operates over 1,800 stores in Greater China, including DQ's Blizzard & Burgers business, and employs nearly 10,000 full-time and part-time staff, according to the company's website.
The DQ brand is owned by Warren Buffett's Berkshire Hathaway Inc. and has approximately 7,000 stores in over 30 countries worldwide. The brand entered the Chinese market in 1992.
CFB Group also owns the local Chinese restaurant brands Brut Eatery and Jinyaju. The company was founded in 2003, with EQT AB acquiring a majority stake in 2013. FountainVest purchased CFB's shares from EQT in 2022; the transaction amount was not disclosed.
Several well-known global brands are currently reevaluating their China operations. Starbucks officially announced a strategic partnership with Boyu Capital last November 4th, establishing a joint venture to operate Starbucks' retail business in the Chinese market.
Similarly, Restaurant Brands International has chosen to sell control of Burger King China to buyout firm CPE, indicating that international restaurant chains are adjusting their operational strategies in the Chinese market.
FountainVest was established in 2008 and focuses on investments in consumer, industrial, commercial services, and healthcare sectors. The firm has backed several companies, including US-listed Amer Sports Inc. and New Zealand-based pet food manufacturer Ziwi.
In July of last year, FountainVest agreed to acquire shares in Milan-based EuroGroup Laminations SpA. The company maintains offices in Hong Kong, Shanghai, Beijing, Singapore, and Frankfurt.