Jollibee Foods Corporation Navigates Global Trade Tensions Amid Expansion Plans

Amid escalating global trade tensions, Jollibee Foods Corporation (JFC), the Philippines’ fast-food giant, is taking a cautious yet proactive stance. The company, known for its flagship Chickenjoy meals, has downplayed the direct impact of recent US tariffs on its operations while closely monitoring developments. With a significant presence in North America and ambitious expansion plans, JFC’s response to the shifting trade landscape underscores broader challenges facing multinational corporations from South East Asia.

Trade War Impacts and Strategic Responses

JFC, which debuted in North America in 1998 with its first store in Daly City, California, now operates 103 Jollibee outlets in the region as of December 2024. The company’s broader network spans 369 stores across brands like Red Ribbon, Chowking, and Smashburger. While North American stores contributed 11.9 percent to JFC’s system-wide sales last year—down slightly from 12.5 percent in 2023 due to underperformance by Smashburger—the region remains a critical market for the company’s global ambitions.

US President Donald Trump’s recent imposition of a 17-percent tariff on goods from the Philippines has raised concerns for businesses with cross-border supply chains. Although Trump has temporarily paused reciprocal tariffs for 90 days, JFC acknowledges the potential for indirect effects. In a statement to the Philippine Daily Inquirer, the company noted, “The impact is likely to be indirect” due to its reliance on raw materials sourced primarily from North America for its US products. While JFC did not specify which materials are locally sourced, this strategy appears to shield it from immediate import disruptions.

“Our team is currently assessing the potential impact of the reciprocal tariffs on the business” said a JFC spokesperson, signaling a readiness to adapt. The company also expressed cautious optimism about diplomatic efforts, stating, “Trump’s openness to negotiations with certain countries can be a positive sign.” This balance of vigilance and adaptability reflects JFC’s approach to navigating an unpredictable trade environment.

Expansion Amid Uncertainty

Despite trade headwinds, JFC is pressing forward with ambitious growth plans. The company recently announced an investment of up to 21 billion Philippine Pesos (US$360 million) in 2025 to open as many as 800 new stores across its portfolio, with the Jollibee brand as the primary focus. This follows a strong financial performance in the previous year, with earnings of 10.32 billion Philippine Pesos (US$177 million), a 17.7 percent increase driven by robust sales in both domestic and international markets, as well as gains from a new coffee acquisition.

JFC projects system-wide sales growth of 8 to 12 percent and operating income growth of 10 to 15 percent for 2025, underpinned by its expansion strategy. This optimism persists despite global economic uncertainties, highlighting the company’s confidence in its brand strength and operational resilience. “We are prepared to adapt our sourcing strategies as needed to reinforce supply chain stability and ensure continued operational efficiency” said JFC, emphasizing its proactive stance.

Broader Implications for South East Asian Businesses

JFC’s situation is emblematic of the challenges faced by South East Asian companies operating in global markets amid trade wars. The region, a hub for manufacturing and export-driven economies, is particularly vulnerable to shifts in US trade policy. The Philippines, with its deep economic ties to the US, faces heightened risks from tariffs that could disrupt supply chains and increase costs for businesses reliant on cross-border trade.

For JFC, the indirect effects of tariffs could manifest through higher costs for non-North American inputs or disruptions in consumer markets if broader economic impacts dampen demand. Analysts suggest that while the company’s localized sourcing in the US offers some protection, prolonged trade tensions could strain profitability if reciprocal tariffs are reinstated after the 90-day pause. Moreover, the underperformance of Smashburger—a key part of JFC’s North American portfolio—adds another layer of complexity to its growth strategy in the region.

Yet, JFC’s response also highlights opportunities for regional businesses to pivot. By diversifying supply chains and focusing on local sourcing, companies can mitigate risks associated with global trade disputes. JFC’s readiness to adjust sourcing strategies could serve as a model for other South East Asian firms grappling with similar challenges. Additionally, Trump’s willingness to negotiate with certain countries, as noted by JFC, may open avenues for diplomatic resolutions that ease pressures on businesses in the Philippines and beyond.

North American Market Dynamics

JFC’s foothold in North America, particularly through its flagship Jollibee brand, is a cornerstone of its international strategy. The brand’s growth in the region—evidenced by a rise in sales contribution from 6.2 percent in 2023 to 6.5 percent in 2024—reflects strong consumer demand for its unique offerings. Filipino diaspora communities in the US and Canada have been a key driver of this success, with Jollibee outlets often serving as cultural touchstones for overseas Filipinos.

However, the broader North American portfolio tells a mixed story. While Jollibee stores thrive, Smashburger’s continued weakness has dragged down overall regional performance. This disparity underscores the challenges of managing a diverse brand portfolio in competitive markets. Fast-food chains in the US face intense competition from established players like McDonald’s and Burger King, as well as emerging health-conscious brands. For JFC, sustaining growth will require not only expansion but also targeted efforts to revitalize underperforming segments like Smashburger.

Global Trade Tensions in Context

The backdrop to JFC’s challenges is a broader escalation of global trade tensions, particularly between the US and key trading partners in Asia. Tariffs, often used as leverage in geopolitical negotiations, have become a recurring tool in US policy under Trump’s administration. For South East Asian economies, which rely heavily on exports to the US, such measures pose significant risks to growth and stability.

The Philippines, while not as large a trade partner as China or Vietnam, is nonetheless affected by these policies. The 17-percent tariff on Philippine goods, though temporarily paused, signals a potential shift toward broader protectionist measures that could impact a range of industries beyond fast food. For JFC, the indirect effects of such policies could ripple through supply chains, consumer confidence, and investment decisions.

At the same time, the pause on reciprocal tariffs offers a window of opportunity. If negotiations between the US and the Philippines yield favorable outcomes, businesses like JFC could benefit from restored stability. The company’s acknowledgment of Trump’s openness to dialogue suggests a hope for such resolutions, though it remains prepared for various scenarios.

Looking Ahead

As JFC charts its course through global trade uncertainties, its dual focus on expansion and adaptability will be crucial. The company’s significant investment in new stores signals confidence in its long-term prospects, even as it braces for potential tariff-related challenges. For South East Asian businesses watching JFC’s moves, the fast-food giant’s strategies could provide valuable lessons in resilience and strategic planning.

Questions remain about how sustained trade tensions might reshape the region’s economic landscape. Will temporary pauses in tariffs lead to lasting agreements, or are businesses like JFC facing a new normal of uncertainty? As the 90-day window on reciprocal tariffs nears its end, the answers to these questions will likely shape not only JFC’s future but also the broader trajectory of South East Asian trade relations with the US.