Starbucks relinquishes control for the first time in 27 years of entering the Chinese market; company-owned stores will become franchised.

How Will AI · How Will Boyu Capital’s Background Help Boost Starbucks’ Expansion Goals?

On April 2 local time, Starbucks Corporation (Nasdaq: SBUX) announced that the joint venture between Starbucks and Boyu Capital, which had been previously announced, has officially been completed.

Under the terms of the agreement, the joint venture currently operates about 8,000 Starbucks company-operated coffee stores, and these stores will gradually transition to a franchising model. The two parties’ shared long-term goal is to ultimately expand the number of stores to 20,000.

The establishment of the joint venture is intended to strengthen Starbucks’ ability to expand its business footprint, deepen its localization strategy, and enhance the customer experience, while also maintaining the integrity of its brand and values. With the transaction completed, Starbucks and Boyu will enter the operational phase of the joint venture, focusing on expansion and innovation.

In November last year, Starbucks announced that it had reached an agreement with Boyu to form a joint venture to jointly operate Starbucks’ retail business in the China market. Under the agreement, Boyu will hold up to 60% equity in the joint venture, Starbucks will retain 40% equity, and it will continue to serve as the owner and licensor of the Starbucks brand and intellectual property, granting licenses to the newly formed joint venture. Based on an enterprise value of approximately $4 billion (excluding cash and debt), Boyu will receive its corresponding interest.

Interface News learned from publicly available information that Boyu Investment was founded in 2011. It is an alternative asset management firm that is deeply involved in the China market and has a global layout. Its investment matrix includes private equity investments, strategic allocations in listed companies, logistics warehousing and data center investments, venture capital investments, and more. It mainly focuses on three key areas: technology innovation, consumer retail, and healthcare. Currently, it manages U.S. dollar funds with a total fund-raising size of nearly $10 billion, making it one of the largest private investment companies in China.

Starbucks officially entered mainland China in January 1999. Its first store was located at Beijing’s China World Trade Center, and it has been operating there for 27 years to date.

On January 29 local time, Starbucks issued a statement saying that the goal for fiscal year 2028 is to net add more than 2,000 global company-operated and franchised stores, including about 400 U.S. company-operated stores; achieve consolidated net revenue growth of 5% or more; and grow same-store sales by at least 3% globally and in the U.S.

According to the FY2026 first-quarter performance report released by Starbucks on the evening of January 28 (for the period ended December 28, 2025), by the end of this quarter, Starbucks’ total global store count reached 41,118. Of these, 128 net new stores were added in the first fiscal quarter, and company-operated stores accounted for 52%.

Meanwhile, in the China market, as of the end of this quarter, the total number of stores was 8,011, compared with a net increase of 326 stores in the same period of FY2025. China store count accounts for 35% of Starbucks’ international store total and 20% of the global total, indicating the key position of the China market in Starbucks’ global layout.

In terms of performance, the company’s consolidated net revenue in the first fiscal quarter increased 6% to $9.9 billion, or 5% growth on a constant-currency basis. Among them, revenue from the China market achieved double-digit growth, up 11% year over year to $823.4 million.

During the period, global same-store sales increased 4%, mainly driven by a 3% increase in transaction volume and a 1% increase in average ticket size. Same-store sales in China increased 7%, benefiting from a 5% increase in transaction volume and a 2% increase in average ticket size.

However, while revenue grew, Starbucks’ global profitability indicators declined during the period—GAAP operating profit margin narrowed by 290 basis points to 9.0%; GAAP earnings per share were $0.26, down sharply by 62% compared with the same period last year. At the earnings call, Starbucks said that the decline in profitability was mainly due to Starbucks increasing labor input to implement its “Reinvention Starbucks” strategy, as well as inflationary pressures driven by high coffee prices and tariffs.