Kamal Al Mana, one of the owners of Qatari conglomerate Al Mana Group, left, poses with McDonald's Korea Managing Director Kim Ki-won, center, and McDonald's Asia Business Lead Stijn Heytens after signing a deal to become McDonald's Korea's developmental licensee in this undated handout photo released on Monday. Courtesy of McDonalds

McDonald's Corp. announced Monday that it has completed the sale of its business in Korea to Kamal Al Mana, one of the owners of Qatari conglomerate Al Mana Group.

According to the fast food franchise, Kamal Al Mana has been appointed as the developmental licensee and will own and operate the McDonald's business in Korea, which includes 400 restaurants, more than 80 percent of which are company-owned.

McDonald's said Al Mana has a proven track record across different industries, including extensive experience in food and beverage, retail, real estate and luxury industries. He is currently the developmental licensee for McDonald's in Qatar and Turkey, as well as a minority partner in the McDonald's businesses in Singapore and Malaysia.

McDonald's did not disclose further details, such as the value of the deal or the governance structure of McDonald's Korea after the deal. McDonald's Korea Managing Director, Kim Ki-won, will continue to lead the business in Korea.

“We look forward to partnering with Kamal to take our brand to the next phase in Korea, which includes our growth ambition to expand from 400 to 500 stores by 2030,” said Jo Sempels, president of International Developmental Licensed Markets at McDonald's Corporation.

“Building on our existing brand strengths and momentum in the market, I am confident we will create exciting experiences for our customers.”

Al Mana said, “I am honored by the opportunity to lead McDonald's Korea in the next phase of its growth journey.

“With our market leadership position and growth potential, this is an exciting time to build upon the strong fundamentals in place and grow the business and brand to the next stage," he added.

Since 2016, McDonald's has been searching for a developmental licensee in Korea, who will own and run the business as the master franchisee.

Last year, McDonald's failed to reach a deal with Dongwon Group, which initially showed interest in acquiring McDonald's Korea, but dropped its bid due to price differences. At the time, Dongwon Group reportedly offered 200 billion won ($152 million) for the Korean license, while McDonald's wanted to receive approximately 500 billion won.

McDonald's struggle to find a developmental licensee for its Korean business was attributable to the company's profitability. According to regulatory filings, HanGook McDonald's, McDonald's Korea's official name, posted 1.12 trillion won in revenues last year, but suffered 20.3 billion won in operating losses, extending its yearly loss for the fifth consecutive year.

The substantial licensing royalties that McDonald's Korea must pay to its headquarters have contributed to the hesitation shown by domestic investors. According to the filings, McDonald's Korea paid 68.5 billion won in commission fees, including licensing royalties, to McD Global Franchising last year, an increase from 62 billion won in 2022.

McDonald's Korea Developmental Licensee Kamal Al Mana speaks during a meeting with McDonalds' Korea employees in Seoul, Monday. Courtesy of McDonald's Korea

Against this backdrop, the latest deal is seen as McDonald's attempt to finalize its long-delayed search for an operator for McDonald's Korea by licensing it to a Qatari tycoon with extensive experience in retail businesses.

According to McDonald's, its outlets operated by Al Mana, have shown steady growth. Since opening its first store in 1995 in Qatar, McDonald's has expanded to 77 locations as of 2024, continuing a trend of ongoing expansion. McDonald's in Turkey, where Al Mana became its developmental licensee in 2022, saw a 40 percent increase in average store visitors in 2023 compared to 2021.

“As Mr. Al Mana has been setting model cases of successes in Asia, we expect he will lead McDonald's Korea's business and brand growth as the DL,” a McDonald's Korea official said, noting that Al Mana has promised enough support for sustainable growth and human-orientated management.