McDonald's continues search for strategic partner in Korea

McDonald's Korea CEO Kim Ki-won talks about the company's 35 year history at a press conference in Seoul, Wednesday. Courtesy of McDonald's Korea

By Kim Jae-heun

McDonald's Korea is still looking for a strategic partner to operate its fast food business in what is an increasingly competitive franchise market here, a company official said Wednesday.

"McDonald's operates its franchise business through strategic partnerships in approximately 80 countries worldwide. McDonald's Korea is also searching for a partner company to achieve long-term growth and development," said McDonald's Korea CEO Kim Ki-won during a press conference at a hotel in Seoul, commemorating the company's 35th anniversary. "Our objective is not to pursue a short-term profit-oriented acquisition. We are currently evaluating various options and will disclose our decision at an appropriate time."

McDonald's has attempted to sell its Korean business twice before, in 2016 and 2022, due to its unprofitable operations. Since 2019, McDonald's Korea has experienced four consecutive years of operating losses amounting to 44 billion won ($33.83 million), 48.3 billion won, 27.8 billion won and 27.7 billion won.

Last year, the company engaged in discussions with local tuna maker Dongwon F&B, which participated in preliminary bidding in February. However, they were unable to bridge the gap in settling on a sale price. McDonald's reportedly proposed an acquisition price of 500 billion won, which was rejected by Dongwon.

Kim stated that the company's current focus is on enhancing the quality of its food and service. "Although we are still incurring losses, we cannot resolve them immediately. It is challenging to develop new menus, maintain quality service, and improve profitability simultaneously. Our goal is to establish a profitable structure by expanding the number of restaurants nationwide and offering high-quality food and service," Kim explained.

The Taste of Korea campaign is one of McDonald's Korea's marketing strategies aimed at facilitating a turnaround. Since 2021, the fast food chain has been collaborating with local farms to introduce exclusive menu items in Korea.

On Thursday, the fast food chain unveiled a new item called the Jindo Green Onion Cream Croquette Burger. Jindo, located in South Jeolla Province, is renowned for its green onions, which grow in fertile soil within a coastal climate, resulting in a firm texture.