McDonald's is still feeling the effects of last year's food safety scandal in mainland China.
JOHANNES EISELE/AFP--Getty Images

The struggling fast-food chain is desperate to cut costs around its global empire and give local operations more autonomy.

By Reuters
June 25, 2015

McDonald’s Corp MCD said it is aiming to sell all of its 413 Taiwan-based stores to a franchise operator, as the U.S. fast-food chain looks to cut costs globally and turn around its flagging China business.

The move could help comfort investors who were skeptical and wanted specific details after McDonald’s new CEO Steve Easterbrook announced a revamp plan in May that included reorganizing business units and selling outlets to franchisees.

“McDonald’s has decided to search for suitable candidates to become its developmental licensee in Taiwan,” the company said in a statement sent to Reuters on Thursday. It added the model would enable “faster local decision-making, quicker learning, and restaurant growth”.

A China-based spokeswoman for the company said the burger chain was looking for a single entity to oversee all of the Taiwan stores. She declined to comment further on the move.

The U.S. chain relies heavily on franchises in more mature markets such as the United States, but traditionally has focused on self-operated stores in China. It has said previously it is trying to increase the proportion of franchised stores there.

McDonald’s, which has close to 20,000 part-time and full-time staff in Taiwan, is also looking to bounce back from a food-safety scare that hit business in China and the wider region last year.

China’s fast-food market was worth 798 billion yuan ($128.53 billion) last year, according to market research firm Euromonitor. Yum Brands Inc’s KFC chain had around 5.1 percent of the market, ahead of McDonald’s share of 2.6 percent.

CEO Easterbrook has said McDonald’s will sell 3,500 restaurants to franchisees by 2018, taking global franchisee ownership to 90 percent from 81 percent now.

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