Who will be the next dining giant to step onto the capital negotiation table?
KFC has once again been acquired by its former "old rival." On December 22, 2025, global private equity giant The Carlyle Group, which once held a 28% stake in McDonald's China, officially finalized the acquisition of KFC South Korea by Carlyle Asia Partners. Although the specific transaction amount was not publicly disclosed, South Korean media reported, citing informed sources, that the acquisition price was approximately 200 billion KRW (around $135 million USD, or 972 million RMB).
This is not Carlyle's first acquisition of a KFC business. In July 2024, Carlyle completed the full acquisition of over 1,200 KFC stores in Japan for a total price of $835 million USD (approximately 5.85 billion RMB). Against the industry backdrop of persistent global inflation squeezing profit margins in the dining sector and rapidly iterating consumer demand, since 2025, regional operations of leading multinational dining brands like KFC, Starbucks, Haagen-Dazs, and Burger King have frequently been put up for sale and changed hands. From Asia to Europe and America, such capital operations have been successively completed, becoming a core trend in the current dining industry.
KFC South Korea, which opened its first store in Seoul in 1984, had its franchise operations managed by South Korea's KG Group since 2017, and it has changed hands twice in the last three years. In early 2023, local South Korean investment firm Orchestra PE acquired all of KFC South Korea's business from KG Group for a price of about 70 billion KRW; merely two years later, Orchestra PE finalized its resale to global private equity giant Carlyle Group for approximately 200 billion KRW.
With less than three years between the two transactions, KFC South Korea's valuation nearly tripled, surging over 186%. This is not a case of a "sucker" taking over a bad deal, but rather reflects KFC South Korea's achievement of a business recovery from long-term operational stagnation and financial pressure. Previously, KFC South Korea had been mired in operational decline, with store numbers shrinking from a peak of over 300 to around 200, and it once faced technical insolvency, reporting an operating profit of only 7.7 billion KRW (over 4 million RMB) in 2020.
After hitting bottom, KFC South Korea achieved a recovery. Disclosures show its full-year operating profit for 2024 surged 469% year-on-year to 16.4 billion KRW (over 80 million RMB), reaching a record high. After Orchestra PE took over, it alleviated KFC South Korea's financial pressure through capital injection, while promoting light operational adjustments such as menu localization optimization and deepening delivery channels. Combined with the brand's own operational improvements, the strategy gradually showed results.
In terms of market scale, KFC's store footprint in South Korea was already smaller than its old rival McDonald's. To date, KFC South Korea operates over 200 stores nationwide, a reduction from its peak period, while McDonald's operates about 400 stores in South Korea, making KFC's store scale roughly half that of McDonald's. This is not due to low acceptance of Western fast food by South Korean consumers; on the contrary, South Korea is one of the global markets with the highest density of fried chicken stores per capita, with local fried chicken chains ubiquitous. For KFC to gain a foothold in the South Korean market, it must directly compete not only with multinational fast-food giants like McDonald's but also with leading local fried chicken brands. Managing to emerge from an operational trough and achieve record revenue amidst such intense competition demonstrates the restoration of KFC South Korea's operational capabilities and the resilience of the brand itself.
Now, the controlling stake in KFC South Korea has changed hands again, with the acquirer once again being Carlyle Group. With this move, Carlyle now holds the full operational rights to both KFC Japan and KFC South Korea.
Carlyle Group's finalization of the acquisition of KFC South Korea's business is actually part of its strategy to position itself in the Asian fast-food sector. In 2016, when McDonald's headquarters bundled and sold its Northeast Asian operations, Carlyle once led a consortium with South Korea's Maeil Dairy to bid for McDonald's South Korea business. However, the acquisition ultimately fell through due to McDonald's South Korea's consecutive years of losses at the time—reporting an operating loss of 27.8 billion KRW in 2021—coupled with a failure to agree on price. This near-miss set the stage for Carlyle's subsequent moves involving McDonald's China and KFC.
After missing out on McDonald's South Korea, Carlyle turned its attention to a larger market. In 2017, Carlyle partnered with CITIC Capital to invest $2.08 billion to acquire the McDonald's China and Hong Kong businesses, with CITIC holding 52%, Carlyle holding 28%, and McDonald's Global retaining only a 20% stake. Carlyle and CITIC jointly led the localization of McDonald's China's operations. Empowered by CITIC and Carlyle, McDonald's China entered a period of rapid expansion, with store numbers doubling from about 2,500 in 2017 to over 6,000 by 2023, making China McDonald's second-largest global market.
The essence of capital is ultimately to exit at the opportune moment, and this investment saw a perfect conclusion. In November 2023, Carlyle announced the sale of its entire 28% stake in McDonald's China back to McDonald's headquarters; the transaction was formally completed in January 2024, increasing McDonald's Global's shareholding from 20% to 48%. This exit was regarded by the industry as a highly successful investment for Carlyle: over six years, Carlyle helped McDonald's China complete its digital transformation and territorial expansion, ultimately cashing out approximately $1.8 billion, achieving a 6.7x return on investment.
In fact, while preparing to exit McDonald's China, Carlyle had already quietly shifted its investment direction, precisely targeting the KFC brand under Yum! Brands and embarking on a new layout in the fast-food sector. Carlyle's dining investments in Asia have been step-by-step and rhythmically clear. In 2021, Carlyle took the lead by investing approximately 800 billion KRW (about 4.3 billion RMB) to acquire a controlling stake in the leading South Korean local coffee chain brand A Twosome Place from Anchor; the brand now operates about 1,700 stores in South Korea, firmly placing it in the core tier of the South Korean coffee market.
In May 2024, Carlyle scored another victory, acquiring KFC Japan Co., Ltd. in full from Mitsubishi Corporation for a price of $835 million USD (approximately 5.85 billion RMB) and taking it private. As of 2025, KFC Japan's store count has reached 1,277. Now, with Carlyle finalizing the acquisition of 100% of KFC South Korea's equity for 200 billion KRW (approximately 950 million RMB)—a transaction expected to be completed in the first half of 2026—Carlyle has officially brought the KFC businesses in both Japan and South Korea, the two core East Asian markets, into its portfolio. The combined store count of KFC in these two markets exceeds 1,470, forming the core of Carlyle's footprint in the Asian fast-food sector.
In the core fast-food sector, Carlyle has consistently kept a close watch on large multinational dining brands, having also engaged in talks regarding Sapphire Foods, a leading franchisee of KFC and Pizza Hut in the Indian market, although a deal was not ultimately reached. It is worth noting that Carlyle entered the bidding for a stake in Starbucks China this year and advanced to the final round, demonstrating its ambition to secure core dining assets in Asia.
Carlyle's investments in local dining and niche sectors are equally diverse. Beyond controlling South Korea's A Twosome Place, it has also acquired a 75% stake in Japanese izakaya chain Chimney Company, took a 26% stake in leading Taiwanese conveyor belt sushi brand Sushiro in 2023, achieving joint control with the founding family, and has previously invested in targets like the Chinese local hot pot brand Little Sheep.
Carlyle's dining investment logic has been clear, consistent, and a proven, mature model from the start: target the core regional operations of globally leading chain dining brands, acquire controlling stakes through full acquisitions or joint ventures, leverage its substantial capital strength and mature operational empowerment capabilities to help the targets optimize operations, improve performance, and increase valuation, then opportunistically exit the equity to achieve high returns. The ambition of this global top-tier private equity giant, which manages assets of approximately $474 billion, has never been merely to be a financial investor in single brands, but rather to position itself as an integrator and value enabler for multinational dining assets.
Now holding the core KFC businesses in Japan and South Korea, Carlyle has undoubtedly become a capital player that cannot be ignored in the Asian dining sector. And from coffee to sushi, from hot pot to fast food, Carlyle's diverse investments in the dining field continue unabated; this布局 around global core dining assets is clearly far from over.
In recent years, the global consumer services industry has been undergoing a wave of industrial restructuring, with changes in the chain dining sector being particularly pronounced. Numerous internationally renowned dining giants have seen密集 activity involving equity transfers, brand ownership changes, and business reorganizations. A core, highly consistent characteristic of this adjustment wave is the gradual relinquishment of control by foreign brands, with capital acquisitions becoming mainstream.
Starbucks, known for its direct-operated model in China, also took a key step towards relinquishing control this year. On November 4, 2025, Starbucks announced the establishment of a joint venture with China's Boyu Capital, wherein Boyu Capital will hold up to 60% of the JV, with Starbucks retaining only a 40% stake and stepping back to a brand licensor role. The transaction was valued on a debt-free, cash-free basis at approximately $4 billion, meaning Starbucks gave up controlling stake in its China operations, introducing local capital as the major shareholder.
Starbucks' relinquishment of control was an inevitable choice under internal and external pressures. On one hand, Starbucks China's growth momentum has slowed in recent years, with fiscal year revenue growth falling to single digits, making growth bottlenecks increasingly apparent. On the other hand, fierce competitive offensives from local coffee brands like Luckin Coffee and Mixue Bingcheng have continued to capture market share, forcing Starbucks' average ticket price downward. For the 2024 fiscal year, Starbucks' global revenue grew only 0.56%, with net profit declining 8.8%. To retain customer traffic, Starbucks, which adheres to a premium "third place" positioning, had to join the price war, a compromise that has continually eroded its profit advantages. Boyu Capital, as a core investor in local consumer brands like Mixue Bingcheng, has deep insights into the operational logic of the Chinese consumer market, which Starbucks recognized.
Following this equity change, Starbucks plans to leverage local capital to accelerate its expansion into lower-tier markets, aiming to grow from the current over 8,000 stores to 20,000 stores. Simultaneously, it can recoup approximately $2.4 billion in funds through the equity transfer, alleviating financial pressures for its transformation in the North American market. This equity adjustment by Starbucks represents a "giant turning around"—a necessary move forced by market competition as well as a strategic choice made after assessing the situation.
Coincidentally, in the same week Starbucks finalized its deal, another international fast-food giant completed a capital changeover for its China operations. On November 10, 2025, Burger King China announced a cooperation agreement with CPE Yuanfeng, whereby the latter invested $350 million (approximately 2.5 billion RMB) to acquire about 83% controlling stake in Burger King China, leaving its parent company, Restaurant Brands International (RBI), with only a 17% stake. Burger King China thus officially "sold itself" to a local PE firm.
The root cause of Burger King's ownership change lies in its long-term operational struggles and failure to adapt locally in China. Data shows that after Burger King China's store count peaked at 1,587 stores in 2023, it has continuously contracted, now standing at only about 1,250 stores, a net closure of over 250 stores within two years. Performance has been equally dismal, with its system-wide sales declining from $804 million in 2023 to $668 million in 2024, and further shrinking to $481 million in the first three quarters of 2025. Average annual sales per store were only $400,000, ranking at the bottom among Burger King's major global markets. In contrast, Burger King's average annual sales per store in South Korea are about $1.2 million, and in France, as high as $3.8 million, highlighting the stark disparity and confirming the failure of its localization efforts in China. In 2025, Burger King China closed over 100 stores, leaving many franchisees mired in losses.
Against this backdrop, RBI chose to hand over its China operations to local capital. After taking over, CPE Yuanfeng plans to revitalize Burger King through capital injection for expansion and brand repositioning. This choice also aligns with the development pattern of foreign fast-food giants in China: since 2017, McDonald's China has been majority-controlled by a consortium led by CITIC Capital, with McDonald's headquarters holding a minority stake; the China operations of KFC and Pizza Hut are independently operated by Yum China, which completed a local listing.
The combination model of "Western brand + Chinese capital" has effectively become the industry standard for foreign dining brands to deeply cultivate the Chinese market.
Beyond China, this wave of dining brand ownership changes and contractions is spreading across Asia and globally, with international chain brands in many markets undertaking strategic retrenchment, equity changes, or even business divestitures in recent years. Pizza Hut, a core brand under Yum! Brands alongside KFC, has been under continuous strategic review by the group from 2023 to 2025. In November 2025, Yum! Brands announced the initiation of a comprehensive strategic review for Pizza Hut, not ruling out the possibility of selling the business. The core reason behind this is Pizza Hut's ongoing decline in European and American markets.
In 2020, Pizza Hut's largest U.S. franchisee, NPC, filed for bankruptcy, closing 300 stores and selling the remaining 927. In October 2025, UK Pizza Hut franchise operator DC London Pie again entered administration, directly closing 68 dine-in stores and 11 delivery points, becoming the most notable bankruptcy restructuring event for Pizza Hut this year. Even though Pizza Hut China's store count has exceeded 4,000 and continues to grow, leveraging a lighter, small-store model in lower-tier markets, its traditional dine-in format continues to shrink its presence in most global markets.
Costa, acquired by Coca-Cola for £3.9 billion in 2019, was also reported in 2025 to be considering a full sale. This international coffee brand, which once competed head-on with Starbucks, has struggled to grow under the brand barriers of Starbucks and the cost-effective siege by local coffees like Luckin, ultimately becoming a non-core asset that Coca-Cola plans to divest.
Haagen-Dazs, which once captivated the Chinese market with its premium positioning, saw its parent company, General Mills, also plan in 2025 to sell its directly operated store business in mainland China, opting to exit the self-operated model in favor of agent operations. The reality behind this move remains the brand's weak growth and its market share being continually eroded by local ice cream brands.
It is noteworthy that the strategic adjustments of foreign brands are not limited to the dining sector. French sports retailer Decathlon is also planning to transfer a 30% stake in its China operations. The business restructuring of foreign consumer brands in China is not an adjustment in a single sector but an industry-wide wave sweeping across the entire consumer services industry.
The rise of local brands to overtake established players is not accidental but stems from threefold innovation in cost, channels, and business models: the layout of low-price, small-store formats reduces operating costs; channel strategies focused on community penetration reach a broader consumer base; and self-owned supply chain models tightly control cost and pricing power. These advantages combined give local brands an unparalleled price competitiveness.
In the fast-food sector, while KFC China has over 12,000 stores and McDonald's around 8,000, the local fast-food brand Wallace has nearly 20,000 stores, and Tastien has about 10,000 stores. The landscape in the coffee sector is even more distinct: local coffee chain Luckin boasts over 26,000 stores, and newcomer Cotti Coffee has 18,000 stores, both far surpassing Starbucks China's 8,000 stores.
Faced with such market changes, the brand premium and standardized operational models that foreign dining brands relied on for survival are gradually losing effectiveness, their former光环 fading. They have no choice but to proactively adjust their strategies—either by ceding equity to introduce local or leading capital to empower operations, or by closing loss-making stores and optimizing their business format structures. These are all self-rescue measures taken by foreign brands to adapt to the new market environment.
Who will be the next dining giant to step onto the capital negotiation table?
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