Burger King Plans Major Expansion in China with CPE Investment

Restaurant Brands International Inc. (RBI) has entered into a joint venture with CPE to expand the Burger King brand in China significantly. The agreement aims to increase the number of Burger King restaurants in the region from approximately 1,250 to over 4,000 by the year 2035. This expansion is part of RBI's broader strategy to achieve a net restaurant growth rate exceeding 5%.

CPE will contribute $350 million in primary capital to the joint venture, which will be used to support various aspects of the business, including restaurant expansion, marketing efforts, menu development, and operational improvements. CPE, a Chinese alternative asset manager, will hold an 83% ownership stake in the venture, while RBI will retain a 17% minority position and a seat on the Board of Directors.

The transaction is expected to close in the first quarter of 2026, pending customary regulatory approvals. Upon completion, a wholly owned affiliate of Burger King China will enter into a 20-year master development agreement, granting it exclusive rights to develop the Burger King brand within China.

This initiative aligns with the RBI's strategy to collaborate with experienced local operators and investors, enabling the company to focus on a primarily franchised business model globally. The joint venture is also expected to enhance the RBI's ability to recognize royalties from the Burger King China business, with plans to gradually increase to the full historical royalty rate.

The expansion in China is seen as a critical component of RBI's growth strategy, providing the company with greater visibility towards its long-term restaurant growth targets. The investment by CPE is intended to facilitate the doubling of Burger King's restaurant count in China within five years, setting the stage for further growth to over 4,000 locations by 2035.

Advisors involved in the transaction include Morgan Stanley & Co. LLC as the exclusive financial advisor to RBI, with legal advice provided by Kirkland & Ellis LLP and Haiwen & Partners. Legal advisors for CPE include Morrison & Foerster LLP and JunHe LLP.