In early spring 2026, a rumor circulating in China's private equity market has drawn significant industry attention: prominent firm FountainVest Partners is reportedly considering the sale of its stake in CFB Group. This food and beverage platform, which operates over 1,800 stores across Greater China and holds the master franchise rights for two major international brands, Dairy Queen and Papa John's, is estimated to be valued at approximately $500 million (around RMB 3.45 billion).
This is not an isolated capital event. Shortly before this, Starbucks' China business brought in Boyu Capital, and Burger King China's controlling stake was transferred to CPE Funds. This series of adjustments in the ownership structures of international restaurant chains within the Chinese market signals the arrival of a new era: as incremental growth红利 fades and competition for market share intensifies into what some call a "hell mode," even brands like Dairy Queen, with its Warren Buffett association, or Papa John's, once a supplier to the White House, must re-evaluate their survival strategies in China.
FountainVest's rationale, transitioning from a "rescuer" to a "cash-out" position over a four-year period, is key to understanding the potential deal. To grasp this, one must look back to 2022. At that time, FountainVest acquired a controlling stake in CFB Group from the Swedish private equity giant EQT AB. According to public reports, the transaction cost was approximately $160 million (around RMB 1.022 billion). If an exit is achieved at the reported $500 million valuation, even after deducting operational costs and expenses, FountainVest would realize a paper profit exceeding RMB 2.5 billion, marking it as a highly successful leveraged buyout.
FountainVest's investment style is renowned for its precision. Led by former Temasek executives, the firm has deep investments in the consumer sector. Its core strategy consistently revolves around "industry leaders + resource empowerment," exemplified by its joint acquisition with Anta of Amer Sports and its subsequent IPO, and the recent acquisition of a 92% stake in leading condiment company Jixiangju. Its initial investment in CFB four years ago was driven by the platform's value as the world's largest Dairy Queen franchisee and the largest Papa John's franchisee outside the United States.
The timing for initiating an exit appears particularly strategic. Since 2025, China's餐饮 capital market has exhibited a clear divergence: while fundraising in the primary market has become challenging, high-quality assets have become scarce, shifting valuation metrics from pure scale orientation towards profitability and cash flow. Informed sources suggest that considerations for the sale are still in preliminary stages, with a formal process potentially not commencing until later in 2026. This provides FountainVest with ample flexibility—it can wait for higher offers while retaining the option to hold the asset longer if valuations fall short of expectations. This position of strength is built upon CFB Group's solid operational performance over the past few years.
For FountainVest, a potential sale does not indicate a bearish view on Chinese consumption but rather aligns with the typical lifecycle of a private equity fund, where exits are often sought around the four-year mark for fund maturity. More importantly, under FountainVest's stewardship, CFB Group has transformed from a "scale expansion" model to one focused on "high-quality operations." The current CFB represents a mature asset with stable cash flows. In an environment where confidence in the consumer sector needs rebuilding, such an asset is likely to command a premium price.
However, the deal's completion is not without variables. The $500 million valuation, spread across roughly 1,800 stores, implies a per-store valuation of about RMB 1.9 million. Considering the brand premium of Dairy Queen and Papa John's, along with CFB's smaller but profitable Chinese餐饮 brands like Brut Eatery and Jinyaju, this valuation appears within a reasonable range. Yet, any potential buyer, whether an industrial capital player or another PE firm, will apply distinct valuation models to the two main brands: one is a dominant player in China's ice cream market, while the other remains a marginal competitor in the pizza segment.
CFB Group presents a study in contrasts. It is both a star performer in localizing international brands and an entity grappling with structural imbalances. This dual nature means its valuation in the capital markets is far more complex than a simple sum of its store count.
Within CFB's portfolio, Dairy Queen is undoubtedly the crown jewel. By the end of 2025, DQ's store count in China (primarily in the southern regions operated by CFB) exceeded 1,800, securing its position as the leader in China's chained ice cream market. However, this success stems not merely from the "Buffett halo" but from aggressive and effective localization efforts.
On the product front, DQ has moved beyond reliance on its classic "Blizzard" offering. In 2025 alone, DQ launched over 150 new products, which contributed to more than 60% of its annual sales. From surprising local ingredient crossovers like the "Wuchang Rice Mochi Blizzard" to exclusive ice cream items tailored for platforms like Douyin, DQ has been reshaping ice cream consumption occasions with an innovation pace reminiscent of new tea drinks. This rapid iteration capability has significantly increased its mindshare among younger consumers, with the proportion of consumers aged 16-34 jumping from 42% in early 2020 to 68% by early 2025.
Regarding consumption scenarios, DQ is conducting an aggressive experiment in "category crossover." Starting in 2024, DQ opened "Blizzard & Burgers" locations in Shanghai, entering the casual dining space. It subsequently tested handmade custom cake shops, pulling ice cream cakes from festive occasions into everyday "single-serving" consumption. Its newest flagship store in Shanghai's iapm mall integrates ice cream, cakes, bagels, and coffee, aiming to capture a share of the afternoon tea market. CFB Group CEO Xu Weilun has a clear understanding: the natural consumption frequency of ice cream is lower than that of tea drinks, necessitating an expansion into a broader "indulgence category" to widen its competitive moat.
It is this innovation, driven by a sense of urgency, that enabled DQ to deliver strong results in 2025, achieving double-digit growth in both revenue and profit, with average store sales increasing by 11% year-over-year. For potential acquirers, DQ represents not just a cash cow but an operational platform proven capable of continuous evolution.
In stark contrast to DQ's success, Papa John's position in the Chinese market is considerably more challenging. As the world's third-largest pizza chain, Papa John's has long been a marginal player in China. By the end of 2025, Pizza Hut China's store count surpassed 4,000, Zunbao Pizza exceeded 3,000, and Domino's broke through 1,300, while Papa John's store count remained around 300.
Confronted with this landscape, CFB has adopted a pragmatic survival strategy for Papa John's: strategic retrenchment and a focus on value. Over the past two years, Papa John's has closed a number of large, dine-in focused stores, shifting its model towards a Delivery, Walk-in, Small dine-in (DWS) format. On pricing, while the industry grappled with a price war featuring 9.9 RMB pizzas, Papa John's abandoned its previous experiments with 39-49 RMB offerings. Instead, it introduced products priced at 69 RMB and above, emphasizing better ingredients and "quality-for-price" value.
This seemingly counter-intuitive approach has yielded unexpected positive results. CFB indicated that Papa John's average order value has stabilized, and customer traffic has become more consistent. In July and August 2025, same-store sales growth rates recorded double-digit increases. This hints at a subtle shift in the Chinese餐饮 market: following extreme price competition, a segment of consumers is beginning to return to a more rational demand for product quality.
However, with only a 1.2% share of the pizza market's Gross Merchandise Value (as of September 2025), Papa John's holds limited bargaining power in any sale negotiation. Its value to a potential buyer is likely more as an "add-on" to DQ—a piece that completes the Western cuisine category portfolio within the group. A plan to double the store count over the next five years sounds ambitious, but achieving it will be highly challenging against the backdrop of leading brands also accelerating their expansion into lower-tier cities.
Therefore, any serious bidder for CFB will need discerning vision: they must recognize the premium associated with DQ as a high-quality cash cow and innovation leader, while also understanding that Papa John's requires not just capital infusion but a more fundamental overhaul of its business model. As a whole, CFB's value lies in demonstrating that, even in a highly fragmented market, international brands can not only survive but thrive through refined operations and localized innovation.
Regardless, the rumors surrounding CFB's potential sale signify a new normal for China's餐饮 industry: brands have no permanent owners, only the imperative for constant evolution. For FountainVest, a successful exit at a $500 million valuation would mark another highlight in its investment track record. For CFB, regardless of its future owner, as long as Dairy Queen maintains its ability to launch 150 new products annually and Papa John's holds the line on quality amidst price wars, this platform of 1,800 stores retains significant potential. In the endless marathon of the餐饮 industry, the comings and goings of capital are merely baton passes at the supply stations; the real race is always fought within the confines of each store and on the palate of every consumer.
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