Business Intelligence on Retailing, Franchising, and Consumerism in China

Taiwan's President Chain Store, Japan's Royal Holdings Create Chinese Retail JV

President Chain Store, a subsidiary of Taiwan's Uni-President Group, has announced that it has set up a food and beverage joint venture in Shanghai with Japan's Royal Holdings.

The partners already opened a new Royal Host Western-style restaurant at Shanghai's Metro City earlier this month.

Under the contract signed by the two parties, President Chain Store and Royal Holdings will invest USD6 million in the new JV, with President Chain Store owning a 51% stake and Royal Holdings owning the remaining 49%. At the same time, the new company will have registered capital of USD3 million.

As one of the most famous family restaurant brands in Japan, Royal Holdings focuses on Western-style meals. Royal Host was established in 1950 and it now has 300 outlets in Japan. The company has already been listed in Japan and its annual operating revenue is about JPY10 billion.

President Chain Store revealed that Royal Host's target customers in Shanghai are upscale professionals between the ages of 20 and 35. At present, President Chain Store has gained the acting rights to the Royal Host brand in Zhejiang, Jiangsu, and Shanghai. The company will first tap the Shanghai market and is planning two new restaurants in 2011. After that, it will seek development opportunities in other regions in the Yangtze River Delta.

President Chain Store operates Starbucks, Afternoon Tea, Mister Donut, and 7-Eleven stores in Shanghai. With the joining of Royal Host, the company enhances its food and beverage industry retail chain.

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