TABLE OF CONTENTS

1. INTRODUCTION
1.1 COMPANY PROFILE
1.1.1 Evolution of the Company -------- 1

1.1.1Products and Services -------- 2

1.1.2 Safety Standards -------- 3
1.2 Collaborators -------- 4
1.3 Top Shareholders -------- 6
1.4 Employment Composition --------
7
1.5 Target market and Potential demand -------- 8

2. EXTERNAL IMPACT
2.1 Environment/Communities -------- 9
2.2 Political Views -------- 10
2.3 Legal Issues -------- 10
2.4 2020 Pandemic Adjustments -------- 11
2.5 News and Current Affairs -------- 12

3. ECONOMIC ANALYSIS
3.1 National Performance -------- 13
3.2 Comparison against competitors -------- 13

4. FINANCIAL ANALYSIS
4.1 Revenue vs. Expense -------- 14
4.2 Assets vs. Liabilities -------- 15
4.3 Market Growth -------- 19
4.4 Status amidst the Pandemic -------- 20

5. RATIO ANALYSIS
5.1 Profitability
5.2 Stability
5.3 Liquidity/Solvency
5.4 Operating Efficiency
5.5 Financial Leverage

6. CONCLUSION

7. REFERENCES

8. APPENDICES
8.1 Common Size- Statement of financial position
8.2 Common Size- Statement of Comprehensive Income
8.3 Ratios
1.INTRODUCTION

1.1 COMPANY PROFILE

Jollibee is the largest fast-food chain

in the Philippines, operating a network of
over 900 stores worldwide. A dominant
market leader in the Philippines, Jollibee
enjoys the lion’s share of the local market that
is more than all the other multinational brands
combined. The company has also embarked
on an aggressive international expansion plan,
and currently has more than 100 stores
outside the Philippines and is present in the
USA, Vietnam, Hong Kong, Saudi Arabia,
Kuwait, Brunei, and Singapore firmly
establishing itself as a growing international
QSR player.

1.1.1 EVOLUTION OF THE COMPANY

Jollibee began as a two-branch ice cream parlor in 1975 offering hot meals and
sandwiches became incorporated in 1978 with seven outlets to explore the possibilities of a
hamburger concept. Thus was born the
company that revolutionized fast food in the
Philippines.
In 1993, Jollibee became the first food
service company to be listed on the
Philippine Stock Exchange; thus broadening
its capitalization and laying the groundwork
for sustained expansion locally and beyond
the Philippines.

The company acquired Greenwich Pizza in

1994 to penetrate the pizza- pasta segment.
From a 50-branch operation, Greenwich has
established a strong presence in the food
service industry. A year later the company
acquired the franchise of Delifrance, an international food company. This expanded its
penetration in the food service industry into the French cafe-bakery. In 2000, the acquisition of
Chowking allowed it to have leadership in a major fast-food market - the Chinese quick-service
restaurant segment.

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 On March 2004, Jollibee International (BVI) Ltd., a wholly-owned subsidiary of Jollibee
Foods Corporation completed the acquisition of 85% of the issued share capital of Belmont
Enterprises Ventures Ltd. (Belmont), the holding company of the Yonghe Group of Companies.
The acquisition of Yonghe King has provided the Company an opportunity to become a major
regional player in the Quick Service Restaurant business in Asia. On October 27, 2005, the
Company completed the acquisition of Red Ribbon Holdings, Inc. (“Red Ribbon”), owner of the
Red Ribbon Bakeshop chains in the Philippines and in the United States. Like Jollibee and its
other brands, Red Ribbon is a strong brand with a wholesome and high-quality image driven by
good-tasting food and good-looking stores with excellent service built over years of development.

On July 24, 2007, JFC started testing a new restaurant concept with the trade name
“Manong Pepe’s Karinderia”. This new restaurant concept serves Filipino food at very low price
points, aimed mainly at people in the workforce in urban centers. On October 1, 2008, JFC
completed the purchase of 100% of Hong Zhuang Yuan, a chain of restaurants located mostly in
Beijing, People’s Republic of China.
On April 30, 2010, JFC entered into an agreement that provided joint ownership of San
Ping Wang, a chain of restaurants of 34 stores in Nanning, China.On May 4, 2010, JFC entered
into another joint venture agreement that made it a Master Franchisee in the Philippines of Caffe
Ti-Amo, a gelato, and coffee business.

To support the continued growth of the Company’s retail chain, the company has set up
commissaries (manufacturing and distribution centers) to manage the total supply chain process
of each strategic business unit: from the planning of raw materials and ingredients, distribution,
and logistics.

1.1.1 PRODUCTS AND SERVICES

PRODUCTS SERVICES

Burgers Express delivery service

Noodles Party Services
Sandwiches Drive thru Services
Chicken Snacks
Breakfast meals
Desserts
Beverages

Jollibee Foods Corp (JFC or ‘the company’) is the franchising of quick-service

restaurants (QSRs). The company is also developing and operating QSRs restaurants.
Additionally, it engaged in manufacturing and property leasing activities in support of the QSR
systems. The company also operates a delivery service anytime. Its products portfolio comprises
beverages and desserts, breakfast foods, chicken, kid’s meals, and snacks including burgers,
noodles, sandwiches, and slides. It also provides services including food delivery, food stores
services, and event celebration.

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1.1.2 SAFETY STANDARDS

As Jollibee re-opens more of its stores and resumes dine-in services in select areas, it has
intensified the implementation of safety measures and sanitation protocols for its employee and
customers.

The customer safety journey starts with the crew and store preparations. All store team
members are required to have their temperature checked prior to entry, and while inside – are
mandated to wear full protective gear, observe physical distancing, and practice regular hand
washing and sanitation. The entire store ‚ including store fixtures and utensils ‚ undergo intensive
cleaning and sanitation before, during, and after business operations. Team members are also
given vitamin supplements to boost their immune system and telemedicine support to
immediately attend to their health needs. This will ensure that they are all healthy and fit to
provide the best service to customers, the Alagang Jollibee way.

Customers go through a 3-step safety check before entering the store: one – stepping on
disinfectant mats; two, the strict wearing of face masks and three ‚checking of temperature. Door
handles, and other store fixtures and surfaces are disinfected every thirty (30) minutes. For stores
with Self-order kiosks or SOKs, they make sure that these SOKs are also sanitized before and
after use. Stringent safety protocols are also in place for food preparation and handling.

Jollibee has also installed counter guards at the main counter as an additional safety precaution
for customers and cashiers during order taking. the main counter as an additional safety
precaution for customers and cashiers during order taking. There are cash containers available at
the counter, enabling contactless payment between customers and store crew. Meanwhile, they
can also opt to do cashless payments with the use of their Happy Plus card, PayMaya, debit, and
credit cards. In addition, table guards are installed on dining tables so that customers can also feel
safe and have peace of mind when enjoying their meals inside the store. Jollibee has also placed
markers across their entire store layout ‚ from floor markers, table markers, to seat markers so
customers are consistently guided to maintain at least a 1-meter distance when queuing or dining-
in.

To make sure all protocols are properly adhered to, Jollibee has assigned official Alagang
Jollibee Hygiene Ambassadors in every store. They take the lead and oversee the strict
implementation of safety precautions, such as wearing safety gear, physical distancing, no-touch,
and cashless transactions, and intensified cleaning and sanitation. Jollibee has also dedicated a
priority lane for frontliners, giving medical and healthcare workers, police and military personnel,
and other people involved in providing necessities and essential services, with preferential access
when ordering in stores.

This same high standard of safety is also applied to Jollibee‚ Delivery service, wherein
measures such as intensified sanitation, physical distancing, and no-touch transactions have been
implemented since the start of the ECQ period.

3
1.2 COLLABORATORS

Chowking

The first Chowking opened in the Philippines in 1985 and JFC acquired it in 2000. It is a
chain that serves fast food versions of Chinese-inspired cuisine (plus a pretty good halo-halo).
There are currently 569 Chowking branches in the Philippines, plus another 48 overseas (20 in
the U.A.E., 15 in the U.S., four in Qatar, two in Oman 2, four in Kuwait, and three in Saudi
Arabia), for a total of 617 stores worldwide.

Greenwich

Believe it or not, the Greenwich Pizza chain of restaurants precedes even that of Jollibee.
The first Greenwich opened in 1971 inside the Greenhills Shopping Center. By 1994, it had 50
branches across the country. JFC bought 80 percent of Greenwich in 1994 and completed the full
acquisition in 2006. Today, there are 272 Greenwich branches in the Philippines.

Red Ribbon

Red Ribbon first opened as a small cake shop in Quezon City in 1979. JFC acquired it in
2005. Currently there, are 526 Red Ribbon Bakeshops around the world: 495 in the Philippines
and 31 in the U.S.

Mang Inasal

Mang Inasal’s story is well-known. Founded by Edgar “Injap” Sia II in Iloilo in 2003*,
the BBQ chicken chain became so popular it attracted the attention of JFC, which bought 70
percent of the food chain in 2010 for $3 billion. JFC completed the acquisition in 2016. There are
currently 591 branches of Mang Inasal nationwide.

Burger King

Burger King, of course, is an American food chain based out of Florida, USA. The
Philippine franchise used to be owned by the Ayala group, which sold its stake to a group led by
Alberto Lina and Manny Pangilinan. In 2011, Jollibee paid P65.5 million to acquire a 54 percent

Panda Express

The first Panda Express restaurant opened in Glendale, California in 1983. It currently
has over 2,200 stores worldwide. In 2019, JFC created JBPX Foods Inc., a joint venture with the
Panda Restaurant Group to bring Panda Express to the Philippines.The first Panda Express in the
Philippines opened in SM Megamall later that year, although the company has already announced
a second branch will open soon in SM City North EDSA.

4
Highlands Coffee

Vietnam-based Highlands Coffee was established by Vietnamese-American David Thai

in 1998. It has since been acquired by Jollibee through its JV SuperFoods Group. There are 49
Highlands Coffee branch in the Philippines and 439 in Vietnam, for a total of 488 stores.

Yonghe King

Yonghe King is a fast-food noodle store founded in 1995 and based out of Shanghai,
China. JFC first bought an 85 percent stake in the holding company that owns the brand in 2004
and completed the acquisition in 2016 when it bought out a manufacturing unit that makes food
products for Yonghe King and other businesses.

Hong Zhuang Yuan

Hong Zhuang Yuan is a Beijing-based congee restaurant chain, which JFC acquired in
2008 for P2.5 billion. Hong Zhuang Yuan currently has 32 branches across China.

Dunkin’ Donuts

Founded in Massachusetts in 1950, Dunkin’ Donuts is one of the world’s most popular
coffee and donuts chains. In 2015, JFC, through its subsidiary Jollibee Worldwide, signed a 60-
40 JV with Jasmine Asset Holding to develop and expand Dunkin’ Donuts in China.

Tim Ho Wan

Founded in 2009 in Hong Kong, Tim Ho Wan is famous for its pork buns and for being
awarded a coveted Michelin star within its first year of operations. In 2018, Jollibee announced it
was investing $33.7 million in the fund that controls the Tim Ho Wan brand master franchise
across Asia Pacific except in Hong Kong. JFC hiked that interest up to 85 percent in October last
year.

Hard Rock Café

Hard Rock Café is best known as a theme restaurant centered around rock and roll and
music memorabilia. The two American founders opened the first branch in London in 1971. In
Vietnam, Hard Rock Café is operated under the Superfoods Group, which is a JV between
Jollibee and Viet Thai International.

Smashburger

Smashburger was founded as a fast casual burger restaurant in Denver, Colorado, USA in
2007. JFC bought into the company in 2015 when it acquired a 40 percent stake for $100 million,
and eventually increased ownership to 100 percent in 2018.

The Coffee Bean and Tea Leaf

The Coffee Bean and Tea Leaf was founded in 1963 in Los Angeles, California. JFC
ponied up $350 million in 2019 to acquire the coffee chain. CBTL currently has 1,061 branches
worldwide.

1.3 TOP SHARE HOLDERS

5
 Jollibee Foods Corp (PH:JFC) has 90 institutional owners and shareholders

that have filed 13D/G or 13F forms with the Securities Exchange Commission (SEC). These
institutions hold a total of 50,706,208 shares.
Jollibee Foods Corp (PH:JFC) institutional ownership structure shows current positions in the
company by institutions and funds, as well as latest changes in position size. Major shareholders
can include individual investors, mutual funds, hedge funds, or institutions. The Schedule 13D
indicates that the investor holds (or held) more
than 5% of the company and intends (or

Holder Shares Date Reported % Out Value

Longleaf Partners
9,660,860 Sep 29, 2021 0.87% 36,807,876
International Fund
Vanguard
International Stock
5,899,159 Jul 30, 2021 0.53% 23,508,148
Index-Emerging
Markets Stk
Vanguard
International Stock
4,997,372 Jul 30, 2021 0.45% 19,914,527
Index-Total Intl
Stock Indx
iShares Core MSCI
Emerging Markets 4,000,330 Sep 29, 2021 0.36% 15,241,257
ETF
Goldman Sachs
Emerging Markets 3,599,240 Jul 30, 2021 0.32% 14,342,971
Equity Fund
Price (T.Rowe) Asia
2,762,370 Jun 29, 2021 0.25% 12,278,734
Opportunities Trust
Bernstein Fund,
Inc.-International 2,021,510 Sep 29, 2021 0.18% 7,701,953
Small Cap Portfolio
iShares MSCI
Emerging Markets 1,694,959 Sep 29, 2021 0.15% 6,457,793
ETF
Price (T.Rowe) Asia
1,646,560 Jul 30, 2021 0.15% 6,561,541
Opportunities Fnd
DFA Emerging
Markets Core 1,520,447 Jul 30, 2021 0.14% 6,058,981
Equity Portfolio
intended) to actively pursue a change in business strategy. Schedule 13G indicates a passive
investment of over 5%.

1.4 EMPLOYEE COMPOSITION

Number of Employees: 11, 819 people

6
 Sales per Business

2019 2020 Delta

Food Service 167 227.00 93.1% 121 888.00 94.3% -27.11%
Franchising 11 949.90 6.7% 7 143.87 5.5% -40.22%
Leasing 449.25 0.3% 281.17 0.2% -37.41%

Sales per region

2019 2020 Delta

Philippines 129 914.00 72.3% 78 405.40 60.6% -39.65%
International 50 551.90 28.1% 51 886.40 40.1% +2.64%

Managers

Name Title Age Since

Ernesto Tanmantiong President, CEO & Executive Director 62 2014
Ysmael Baysa CFO, Compliance Officer & VP-Corporate Finance 64 -
Cesar Velasquez Purisima, Dr. Independent Director 60 -
Cossette B. Palomar Director-Investor Relations - 2013
Joseph C. Tanbuntiong Treasurer & Executive Director 56 2014
William Tan Untiong Secretary & Executive Director 65 -
Daniel Rafael Ramon Z. Gomez Chief Marketing Officer 47 2013
Susana K. Tanmantiong Chief Procurement Officer 62 2014
Fernando S. Yu President-Jollibee Business Unit - -
Valerie Feria Amante Vice President & Head-Corporate Legal 46 2007

Members of the board

Name Title Age Since

7
Tony Caktiong Chairman 67 2014
William Tan Untiong Secretary & Executive Director 65 -
Ernesto Tanmantiong President, CEO & Executive Director 62 2014
Cho Sit Ang Non-Executive Director 70 1978
Poe Eng Chua Non-Executive Director 73 1978
Artemio Villaseñor Panganiban Non-Executive Director 83 2012
Joseph C. Tanbuntiong Treasurer & Executive Director 56 2014
Cesar Velasquez Purisima, Dr. Independent Director 60

1.4 TARGET MARKET AND POTENTIAL DEMAND

Jollibee knows their target audience very well: the traditional family and all communication
materials focus on the importance of family values, making Jollibee the number one family fast
food chain in the Philippines and a growing international QSR player. Customer Satisfaction has
always been the company's mission

JOLLIBEE Foods Corp. (JFC)

continues its expansion in North America and
Europe as it sees growing demand for its
Jollibee brand overseas.JFC noted a double-
digit growth for Jollibee in North America,
and a plan to open 50 stores in Europe for the
next three to five years.

2. EXTERNAL IMPACT
2.1EN VIRONMENT/COMMUNITIES

8
Economic drivers and impacts: Approximately 98.09% of the company's revenue

flows back primarily to their key stakeholders, which includes the employees, suppliers,
investors, the government, and partner communities. JFC's widespread presence in the
Philippines shapes their financial performance and how they contribute to the local areas wherein
they operate, through the various opportunities they give to their stakeholders. Their businesses,
which include 3,316 stores, 15 manufacturing plants, and 20 distribution centers in the
Philippines, directly support 16,690 jobs. Other employment opportunities are created from their
business operations through franchising businesses and third-party service providers. The
company also extend their economic gains to local communities. They conduct regular corporate
social responsibility (CSR) initiatives through the Jollibee Group Foundation (JGF) and other
CSR channels with a direction towards uplifting vulnerable and marginalized sectors in the
country. They build capacity in these sectors and involve them in the company's business
operations. Through Farmer Entrepreneurship and ACE Scholarship Programs, JFC have
enabled and supported more than 2,300 farmers since 2008, and assisted over 2,200 scholars
across their various programs since 2005. Through Busog, Lusog, Talino School Feeding
Program, they have built 34 inschool kitchens since 2016. This has enhanced the company's
capability to provide nutritious food to public school students nationwide, serving almost 240,000
pupils since the program’s inception in 2007. Furthermore, they have distributed food items to
over 8,700 calamity-affected families through FoodAID Program, in partnership with other non-
governmental organizations and local government units since 2013.

In line with the written policy, a portion of the revenue is also allotted for the CSR,
appropriating 1.50% of the consolidated income to the JGF. With a higher net income, the
company are able to provide more funds for the community and outreach programs. Furthermore,
tge company also make sure that they provide fair compensation to their employees. They use
industry and national standards as benchmarks for the compensation packages to ensure that
employees may afford decent living conditions.With regard to suppliers, they make sure that the
contract agreements are followed diligently by all involved parties. Contracts are standardized to
ascertain that the content encompasses all types of transactions with a particular supplier, and that
the suppliers are given ample time to review the document before signing. In cases of revisions, a
separate document reviewed by the legal division is attached, detailing all agreed revisions as a
complementing agreement to the standard contract.The retained portion of the company's revenue
is invested into further developing and expanding of businesses. For the security of the
operations, the company maintain their business interruption insurance. Business Continuity
Plans are also in place in order for the company to efficiently withstand changes brought about by
unforeseen events and occurrences.

2.2 POLITICAL VIEWS

9
 Jollibee and its founder and chairman Tony Tan Caktiong are apolitical and as

such do not endorse any political candidate, organization or agenda. Both the company and Mr.
Tony Tan Caktiong are all fair, clean and honest election. Jollibee's thrust as a company, then and
now to continue spreading joy to the Filipino people thru its langhap sarap offerings and joyful
bonding moments.

2.3 LEGAL ISSUES

“Mishandled food is punishable under the Food Safety Act. A fine of at least P100,000 and a
one-month suspension can be slapped for the first offense.”

Jollibee Foods Corporation closed down a branch of its fast-food chain in Bonifacio
Global City for three days, after a viral video tweet showing that a deep fried towel had been
served to a customer instead of fried chicken. The tweet, which has since been deleted, had
garnered over 3,500 re-tweets and 6,600 likes. Jollibee said the company is “deeply concerned”
over the incident and will conduct a thorough investigation. As a result of the incident, Jollibee
directed the Jollibee Bonifacio-Stop Over branch to close for three days to thoroughly review its
compliance with procedures and retrain its store team to ensure that this will not happen again.

.Establishments that have not prepared food in accordance with acceptable manufacturing
practices can be slapped with a P100,000 fine and a one-month suspension of operations for the
first offense under Republic Act No. 10611 or the Food Safety Act.. For violations resulting in
slight injuries due to food mishandling, a fine of P300,000 at most can be slapped, as well as a
six-month suspension of operations. The offender will also have to pay for the hospital fees of the
injured person. For violations resulting in death, the offender will face jail time of six months to
six years and be fined P500,000 at most upon conviction. The store will also be shut down
permanently.
Jollibee also face labor issues. The Department of Labor and Employment (DOLE) has
ordered Jollibee Foods Corp. to regularize some 6,482 of its workers deployed by two contractors
in Metro Manila.. According to DOLE Undersecretary Joel Maglunsod, Jollibee will have to
provide “regular employment status” to the concerned workers.

Jollibee Foods Corp. (JFC) said in a statement that the company had received the order
from the DOLE and the firm is following the process the department had prescribed to appeal the
order. DOLE also ordered the company to refund illegally collected payments to 426 affected
workers in the amount of P15,432,305 for Coop Share, Coop Christmas Party Paluwagan Fund,
and Coop Savings Fund.

Based on a report of DOLE National Capital Region director Henry John Jalbuena, five
of Jollibee’s contractors were also ordered to return unlawful wage deductions, bonds, donations,
shares and other illegal payment collections to 412 affected workers amounting to P4,137,158.15.

2.4 2020 PANDEMIC ADJUSTMENTS

10
Jollibee Foods Corp., the largest Philippine restaurant operator, is looking toward

foreign expansion and “opportunities” created by Covid-19 as it rebounds after historic losses
induced by the pandemic.

After a restructure amid last year’s setback, Jollibee CEO Ernesto Tanmantiong plans to
open 450 restaurants around the world this year while looking for acquisitions that could be
funded with the company’s 57.5 billion pesos ($1.2 billion) in cash and short-term investments.
Tanmantiong still hopes to achieve a long-term goal of turning the Manila-based company into
one of the world’s top five restaurant operators. Jollibee posted a 11.5 billion peso net loss last
year -- its first annual loss in at least three decades -- as dining out was hammered by the virus.

Jollibee, like restaurant chains around the world, faces a landscape altered by Covid-19.
The Philippines sank into recession in 2020, and the strength of its expected recovery may be
weaker than initially thought amid an escalation in cases and delayed national vaccination
campaign. It has the second-highest number of infections in Southeast Asia, and mobility curbs
imposed over the last year have hurt businesses -- with restaurants and tourism-related ventures
among the hardest hit.
In a bid to counter the impact of the virus, Jollibee -- known for dishes like crispy fried
chicken and sweet spaghetti -- has spent 7 billion pesos on what it calls a business transformation,
including upgrades to its delivery and online sales platform. As part of its PHP7-billion business
transformation, the company focus on its delivery, drive-thru, and take-out. The company also
talked about its cloud kitchens, which are small, unmarked delivery outlets that enable JFC to
quickly expand delivery coverage. For dine-in, given its importance to the business and
especially as restrictions ease in different markets, the company expounded on its heightened in-
store safety measures. 
 
These measures include the installation of acrylic partitions on tables and counters and
temperature checks before entry as applicable, the provision of sanitizers for customers, and the
implementation of social distancing guidelines. The company also bared its plans to expand and
open new stores on a highly selective basis as more prime locations become available at lower
rental costs.
 
JFC is seeing encouraging signs of recovery and improvement across its portfolio of
brands. Sales recovery has already started in the US, China, Vietnam, Singapore, Hong Kong,
and Brunei. It is also seeing significant improvements in sales in the Philippines, especially with
50 to 75 percent dine-in capacity now allowed.
 
Meanwhile, JFC, through its social responsibility arm Jollibee Group Foundation,
donated PHP220 million worth of food to frontliners and families in need in the Philippines -
providing meals for 1.3 million frontliners, and 2.5 million food packs to over 500,000 indigent
families.  JFC also allocated a PHP1 billion emergency fund to provide the full-month salary
during enhanced community quarantine (ECQ) and advanced payout of 13th month pay for all of
its work teams, including senior citizens and persons with disabilities (PWDs) assigned in the
jobs program in partnership with local government units (LGUs).  The same assistance was
extended to its partner employers to provide financial support to their employees. This was also
in response to the government’s call to assist workers during the health crisis.

2.5 NEWS AND CURRENT AFFAIRS

11
 Homegrown fast-food giant Jollibee Foods Corporation (JFC) swung back to profitability
in the first nine months of 2021, and attributed the reversal to its business transformation program
aimed at adapting to challenges brought by the COVID-19 pandemic. In a disclosure to the
Philippine Stock Exchange on Tuesday, Jollibee Foods reported an attributable net income of

P2.7 billion during the January to September 2021 period, a reversal from the P13.5-billion net
loss sustained in the same period last year. In the third quarter alone, the company recorded net
earnings of P1.57 billion, a turnaround from the P1.58-billion net loss recorded year-on-year.

The company attributed its positive financial performance to “significant operating profit
improvement of JFC’s Philippine business, resulting from its Business Transformation program.”
Jollibee’s business transformation program, launched in May 2020, includes the permanent
closure of 486 non-profitable stores worldwide and four commissaries in the Philippines. It also
involves the improvement of operating expenses in the remaining stores and supply chain
facilities, and various other cost-saving initiatives.

According to Manula Bulletin ,Over 4,000 pieces of Chickenjoy have been sold, mostly
to British nationals, on the opening day of Jollibee’s debut in London West End, exceeding recent
opening day sales records from Leeds, Leicester City, and Liverpool. Jollibee Foods Corporation
revealed this strong appetite for its bestseller Chickenjoy as the Filipino fastfood chain opened its
Jollibee European flagship restaurant in London’s West End as it aims to take a bigger bite off
the UK’s GBP1.2 billion fried chicken market..
With hundreds of customers lining up, Jollibee reported that its debut in London West
End exceeded opening day sales records from its recent Leeds, Leicester City, and Liverpool
debuts

3.ECONOMIC ANALYSIS

12
3.1 NATIONAL PERFORMANCE

Jollibee Foods Corporation (JFC) runs the largest chain of fast food restaurants in the
Philippines and is reliant on a steady supply of raw materials, such as vegetables, cereals and
animal produce, at significant quantities and stable prices. However, the agricultural sector in the
Philippines is particularly vulnerable to such extreme weather events as typhoons, and when
extreme weather reduces crop yields, the price of produce inevitably spikes – exacerbated by
middlemen who hike prices exorbitantly.

To mitigate this supply chain risk, in 2009 JFC began sourcing produce directly from
smallholder farmers in addition to its traditional intermediary traders. JFC invested a significant
amount into partnership building and training to organize the farmers into functioning
cooperatives. Buying directly from the farmers has meant that when one area of the country is
producing lower yields, JFC can buy from a less affected region. Product quality is assured and
prices are more stable as the negotiation relationship is directly between JFC and the farmers.

By 2015, Jollibee had helped over 900 farming families in 27 cooperatives with an
increase in income of 200-500%. One-fourth of all vegetable produce sourced by JFC is now
purchased directly from the farmer cooperatives.

3.2 COMPARISON AGAINST COMPETITORS

Jollibee was able to attain a competitive advantage over McDonald’s by doing two
things: (1) Retaining tight control over operations management, which allowed it to price below
its competitor and (2) Having the flexibility to cater to the tastes of its local consumers. While
Tony Kitchener was hired to develop these competitive advantages abroad, his international
strategy of “planting the flag” and “targeting expats” was executed haphazardly and resulted in
losses for the firm. His eventual dismissal was largely due to his inability to manage intra-firm
tensions. The arrival of Noli Tingzon marks a critical juncture for Jollibee, where it will begin
entering the US market. The key to Jollibee’s success in Daly City will be its ability to find a
local partner that can leverage its organizational advantage, while navigating the challenges of
conducting business in the United States.

Jollibee’s success in its home market developed as a result of its ability to better meet the
needs of the Filipino customer.Although its success was mediated by the political and economic
crisesof1983, Jollibee was still able to deliver a product that was both cheaper and better tasting
than that of McDonald’s.The ability of Jollibee to adopt its menu to local tastes, as well as the“5
Fs” of its operations management are two organizational capabilities that led the company to
develop a competitive advantage over McDonald’s.The ability to push forward the Champ burger
highlights another source of competitive advantage that was recognized by Tom Kitchner:
flexibility. As one of the “5 Fs,” flexibility was an asset that Jollibee, could leverage more easily
than McDonald’s. As a younger company, Jollibee has the ability to adapt its menu items
without jeopardizing its brand image.

4.FINANCIAL ANALYSIS

13
4.1 REVENUE VS EXPENSE

PROFITABILITY RATIOS

Profitability ratios is used to evaluate JFC’s ability to profit from sales, operations,
balance sheet assets, and shareholders' equity. It shows how well the company generates profit
and value for its shareholders.

PROFITABILITY 2018 2019 2020

RATIOS
Operating margin 4.99 4.41 -10.14
Profit margin 13.49 11.76 7.1O
Return on Total 6.71 4 -5.99
Assets
Return on Common 15.31 14.07 -18.57
Equity
Basic Earning Power 0.07 0.04 -0.05
Ratio

PROFITABILITY RATIOS
2020 2019 2018

BASIC EARNING POWER RATIO

RETURN ON COMMON EQUITY

RETURN ON TOTAL ASSETS

PROFIT MARGIN

OPERATING MARGIN
-25 -20 -15 -10 -5 0 5 10 15 20

The company's economic downturns in 2019 and 2020 resulted in a negative profitability
ratio in 2020. It is the outcome of the corporation's exorbitant operational costs and little revenue,
as when the company had spent a lot of money on the pandemic adjustments.
Selling more to profitable existing clients is one approach to increase profitability. And this is
exactly what the business has been doing. Developing new ways to help them regain and recover
from their setback.

4.2 ASSETS VS LIABILITIES

14
LIQUIDITY RATIOS

Liquidity ratios are a type of financial indicator that is used to assess a JFC’s capacity to
repay current debt obligations without having to raise additional funds. It is also used to assess
the company’s ability to meet its financial commitments as well as its margin of safety.

LIQUIDITY 2018 2019 2020

RATIOS
Current Ratio 1.25 0.68 1.36

Quick Ratio 1 0.53 1.22

LIQUIDITY RATIOS
2020 2019 2018

QUICK RATIO

CURRENT RATIO

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6

As seen in the chart above, JFC's current ratio declined from 1.25 to 0.68 from 2018 to
2019. This suggests that the company's current assets are insufficient to pay for its short-term
obligations as they become due in 2019. The company's current ratio dropped dramatically in
2019 as a result of the pandemic's restrictions and increased community quarantine.This setback
was quickly recovered in 2020, as seen by a 50 percent improvement in its current ratio. A ratio
greater than one is usually recommended since it indicates that the company's current assets are
sufficient to pay for its short-term liabilities as they become due. Clearly, JFC has shown that
except in 2019 where the ratio is valued at 0.68.

JFC's quick ratio moved in lockstep with the company's current ratio. In 2019, there is a
sharp drop, indicating that the corporation has taken on too much debt and has difficulty to
recover accounts receivables. In 2020, the quick ratio was recovered and increased to 1.22. A
quick ratio of less than one is unfavorable because it implies that the company has taken on too
much debt, that revenues are declining, that accounts receivable are being hard to collect, and/or
that the company is paying its bills too quickly.

ASSET MANAGEMENT RATIO

15
 The asset turnover ratio is a metric that compares the value of JFC's sales or revenues to
its assets. It can be used as a measure of how well the company uses its assets to generate income.
therefore, a higher ratio indicates that JFC has been more efficient with their resources..

ASSET 2018 2019 2020

MANAGEMENT
RATIOS
Inventory turnover 17.11 16 12.67
ratio

DSO- Days of sale 21.22 12.92 11.82

Outstanding Ratio

Fixed Assets turnover 6.77 3.51 1.87

ratio
Total Assets Turnover 1.58 1.18 0.65
Ratio

ASSET MANAGEMENT RATIO

25

2018 2019 2020

20

15

10

0
FIXED...
INVEN...

DSO- ...

TOTAL...

The company's asset management ratios have deteriorated over time, indicating that its
assets are not being used generate sales. Due to the closure of numerous branches in various
places to comply with pandemic regulations and standards, the company's assets were
underutilized. However, the corporation is currently working to implement plans to increase
profits.

DEBT MANAGEMENT RATIO

16
 The debt-to-equity (D/E) ratio is used to determine JFC’s financial leverage. In

corporate finance, the D/E ratio is a crucial measure. It's a measure of how much a corporation
relies on debt to fund its operations rather than totally owned funds. In the event of a business
downturn, it indicates the ability of shareholder equity to satisfy all outstanding debts.

DEBT 2018 2019 2020

MANAGEMENT
RATIO
Total debt to capital 56.16% 71.53% 67.73%

Times Interest earned 18 18.75 -55.75

ratio

DEBT MANAGEMENT RATIO

80
60
40
20
0
TOTAL DEBT TO CAPITAL RATIO TIME INTEREST EARNDED
-20
-40
-60
-80
2018 2019 2020

The preceding figures reveal that debt funds a larger share of the company's assets,
indicating that the company is highly leveraged and at risk of default if creditors begin to demand
debt repayment. JFC should pay off any outstanding debts, raise profitability, improve inventory
management, and restructure its debt.

17
MARKET VALUES RATIOS

The current share price of JFC's stock is evaluated using market value ratios.
Current and potential investors use these measures to judge if the company's shares are
over-priced or under-priced.

MARKET VALUES 2018 2019 2020

RATIO

Price earnings ratio 38.7 37.7 -18.7

Book value 12.3 10.9 0.48

MARKET VALUES RATIO

50
40
30
20
10
0
-10
-20
-30
PRICE EARNINGS RATIO BOOK VALUE
2018 2019 2020

18
4.3 MARKET GROWTH

As of June 2005, Jollibee has a total of 1200 stores locally and internationally. A
diversification of food products enabled the organization to reach out to a variety of customers
and making them as a market leader in the Philippines. Due to the geographical structure of the
country, they are the only fast food chain that operated nationwide, and in some locations face no
other competitions.

The acquisition of several new brands such as Greenwich, Chowking and Delifrance
allow diversification of its products into different market niches. It proved to be a hedge against
downturns and competition and as seen in the case study, most of the acquisitions are the leader
in their respective market segment. The main draw for customers into Jollibee’s restaurants is the
appeal for local styled food catered to Filipinos’ preferences. This is evident as they are
constantly adding its product range on top of their already popular favorites menu, in order to
allow its local customers to experience the traditional Filipino way of having local flavored taste
in a comfortable setting.

Jollibee projects itself as being closer to Filipino families as compared to its competitors.
There is already widespread awareness locally that Jollibee is a local Filipino establishment,
which in turn appealed to the mass population whom felt more comfortable in a familiar setting.
Tailoring its menu towards the Filipino taste, it positioned itself as the favorite destination for
family outings as compared to its similar competitors.Portraying itself as a fast-food outlet of
high-quality at an affordable price specifically tailored for the Filipinos, the chain has appealed to
patriotic locals. With its introduction of in-store play activities for children and a cast of brand
mascots, it reaches and appeals to the children and is evidently more popular than its nearest
competitors. Recognizing that a normal Filipino family’s weekends are normally reserved for
children, the previously mentioned activities add value to Jollibee's position as the prime
destinations for family outings.

Being a major player in the Fast-food industry in Philippines, they constantly enjoyed
economies of scale in terms of retail site selection, procurement, manufacturing, distribution, and
marketing levels unavailable to most industry players.

Jollibee’s product market stakeholders include its customers locally and globally, as well
as suppliers of its food sources.Jollibee has been able to capture the market share of the fast food
going customers due to its understanding of locals’ preferences and it quality and competitive
pricing of its food. An approximate 1 million customers ate at Jollibee’s stores daily, making
them an important stakeholder in this category.The large daily requirement of food resources had
enabled Jollibee to enjoy better prices through economies of scale from its suppliers.

The million consumers walking into Jollibee’s stores daily represent strong demand for
its products. The uniqueness of the geographical landscape of Philippines has also made it a
challenge for fast-food companies. Globally, there are many Filipinos workers situated in the
overseas market, especially in the United States where there are estimated to be around 2 million
Filipino immigrants. Besides the US, many Filipinos are also situated in parts of Asia such as
Hong Kong, Brunei and Indonesia. Not limiting to Filipinos, their stores have also attracted other
Asians to eat at their restaurants.

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4.4 STATUS AMIDST PANDEMIC

Jollibee Foods Corporation swung to profitability in the first quarter of 2021 as it posted
a P49-million net income, reversing its P1.95-billion net loss year-on-year.In a disclosure to the
Philippine Stock Exchange on Wednesday, May 12, Jollibee said its operating income reached
P1.5 billion in the first quarter despite a 13.4% decrease in systemwide sales to P47.78 billion.

Jollibee’s Philippine business sales declined by 21.3%, attributed to the lockdown in the
Greater Manila Area. Temporarily closed stores increased by 4 percentage points to 6% by the
end of March.

Its international business sales, meanwhile, were up by 1.3%. Store sales growth in its
China market accelerated by 47.8%, while North America reached 14.3%. Jollibee cited the faster
and wider coverage of COVID-19 vaccination as well as the more significant assistance provided
by the governments in these regions.

The fast-food giant’s deferred tax assets were also reduced by P629 million, thanks to the
Corporate Recovery and Tax Incentives for Enterprises Act, which lowered corporate income tax.
During the first quarter, Jollibee opened 79 new stores, 19 of which are in the Philippines. A total
of 76 stores closed permanently – 18 in the Philippines and 58 abroad.

As of March 2021, Jollibee operates 5,827 restaurants, including its other brands like
Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, and Panda Express.

20
5. RATIO ANALYSIS

21
6. CONCLUSION

22
7.REFERENCES

https://www.globaldata.com/company-profile/jollibee-foods-corp/
https://www.jollibee.com.ph/
https://bucketeer-db71ed0b-178e-4a82-bfd6-d68a68e0de55.s3.amazonaws.com/public/uploads/
Jollibee-Foods-Corporation-Sustainability-Report-for-the-year-ended-2019.pdf https://
www.pna.gov.ph/articles/1110043
https://www.rappler.com/business/jollibee-closes-bgc-branch-days-fried-towel-incident-june-
2021/
https://www.gmanetwork.com/news/money/companies/810243/jollibee-flips-back-to-
profitability-nets-p2-7-billion-in-first-9-months-of-2021/story/
https://mb.com.ph/2021/05/24/over-4000-chickenjoy-pieces-sold-on-jollibees-west-end-opening/
https://reports.weforum.org/social-innovation/jollibee-foods-corporation/?
doing_wp_cron=1639341853.0708520412445068359375
https://studylib.net/doc/8036691/jollibee-s-international-expansion
https://www.marketscreener.com/quote/stock/JOLLIBEE-FOODS-CORPORATIO-6494491/
company/
https://finance.yahoo.com/quote/JBFCF/holders/
https://fc.dai.co.jp/uploads/global_clients/companies/brochure/jollibee.pdf
https://www.rappler.com/business/jollibee-foods-corporation-earnings-report-q1-2021/
https://nhobeelab.weebly.com/industry-analysis.html
https://courses.lumenlearning.com/boundless-finance/chapter/debt-management-ratios/

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8.APPENDICES

24
1