KUALA LUMPUR: Golden Arches Restaurants Sdn Bhd, the Malaysian subsidiary of McDonald’s Corp, said it is not in a hurry to sell the franchise rights in Malaysia and Singapore, though it has shortlisted several bidders for the deal.

“We have shortlisted several bidders and are discussing the deal with them [the local franchise partners],” Golden Arches managing director Azmir Jaafar told The Edge Financial Daily in an interview.

“We are not in a rush and there is no time frame set [to complete the transaction]. We want to find the right partner that understands the local market, ensure continuity of McDonald’s value and tradition, as well as be backed by strong capital to fund future investments,” he said.

According to him, it has always been the group’s idea to sell the franchise rights to a local partner as it would be more efficient instead of being managed by a corporate entity.

“It makes sense to go back to a local partnership and local shareholders that can manage the business. It is not just about the changing [of ownership], [but] it is about [putting] the right business model at the right time,” Azmir explained.

In July, McDonald’s Corp was reportedly seeking local franchise partners to run its restaurants in Malaysia and Singapore as part of its plan to streamline operations.

Prior to that, McDonald’s Corp president and chief executive officer Steve Easterbrook announced that the global fast-food chain operator would refranchise some 4,000 restaurants between 2015 and 2018, and set an ultimate goal of having at least 95% of its restaurants to be refranchised.

“This is a business transaction and we will ensure the valuation is done properly,” Azmir said.

Currently, there are 260 McDonald’s restaurants in Malaysia, of which 200 are managed by Golden Arches, while the remaining 60 outlets are managed by a third party.

Though Malaysia has a population of only about 30 million, which is relatively smaller compared with China and Indonesia, Azmir, however, still sees huge potential in the domestic market.

“There are still many underserved areas,” said Azmir, referring to the rural areas as well as Sabah and Sarawak.

“As the government is improving the infrastructure in Sabah and Sawarak, I think we can expand our footprint into Kota Kinabalu [in Sabah] and Kuching [in Sarawak] and [other] big cities there,” he said.

According to Azmir, the company intends to open 30 new stores in the Klang Valley, Johor, Melaka, Penang as well as Sabah and Sarawak in the next three years.

This year, he said, the company has targeted five to seven new stores. Two are already in operation — one in Presint 2, Putrajaya and another in Chukai, Terengganu.

“There will be another new store opening next month and one in November and December respectively,” he said, adding that all the new stores are stand-alone stores.

“Our expansion plan [going forward] will be focused in [developing] stand-alone stores as this model worked very well, especially in terms of accessibility and convenience to the public,” he said.

“Our ultimate goal is to have 500 stores in the country,” he said, adding that the company also intends to renovate and remodel up to 30 outlets, each to cost about RM1 million, to enhance customers’ dining experience.

“All these [upcoming] stores to be renovated have been in operation for close [to] 30 years, we will remodel them to provide greater experience, modern and more technology-driven in line with customers’ demand,” said Azmir, who remained bullish on the local food and beverage sector despite the current sluggish economy that has taken a toll on corporate earnings.

Many public listed companies have reported lower earnings due to rising cost arising from the weaker ringgit as well as lower consumer spending. But Azmir remained optimistic that McDonald’s Malaysia’s performance will remain robust as it managed to register record sales in the past few months.

“We still target a higher double-digit growth this year (financial year ending Dec 31, 2016),” he said, as the company keeps enhancing its stores and providing great value to customers.

“We [constantly] improve [our] restaurant quality in terms of food and cleanliness. With the price point we have, you [still] can get food at RM6 to RM8 versus the streets’ average of RM10 to RM15. With this [pricing] strategy, we saw significant market share gain,” he added.

Even with the imposition of the goods and services tax in April last year, Azmir said the company only raised its selling prices by about 1% in April this year to offset the escalating raw material cost.

“This year, although our margin is affected by the weaker ringgit and raw materials but we believe it could be offset by increase in [sales] volume,” he said.

According to Azmir, McDonald’s Malaysia has captured about 40% to 42% market share in the local fast-food market.

“I think there is still room for us to grow as the country’s economy, [people’s] income as well as population are still growing. Hence, naturally, we will [also be] growing.”