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Jollibee’s most expensive IT system upgrade behind closure of 72 stores

Jollibee Food Corporation’s launch of a new enterprise platform — the largest investment in information technology in the company’s history, amounting to at least half a billion pesos for 2014 alone — has caused the temporary closure of 72 stores and the reduction in the menu of many stores.

The affected stores are in Metro Manila and nearby cities, representing 3.2% of JFC’s 2,244 stores nationwide.

“In our estimate, the JFC group has not been able to serve the consumer to the extent of 6% of its normal nationwide sales in the first 7 days of August, 2014,” said JFC in a disclosure to the Philippine Stock Exchange.

The product limitation has been caused by the migration to new systems that started on August 1, 2014, which has resulted in temporary slowdown in sales order taking, product loading and dispatch of transportation.

According to Jollibee, the migration involves the central integrating system, store information systems and several other systems. The company’s Chief Information Officer has not responded to UpgradeMag.com ‘s questions regarding the specific technologies, the provider of the system, and which part of the migration process broke down.

“The purpose of this major investment is to prepare JFC for an accelerated business growth in the Philippines and abroad as it pursues its goal to become the largest Asian restaurant company and one of the most successful restaurant companies in the world,” according to the statement issued by JFC.

JFC said it is doing its best to restore the availability of all its products to normal levels in the next few days, to reopen temporarily closed stores and to restore its service to its customers.

The company maintains that it has sufficient raw materials, finished products and production capacity to meet the consumer demand for the entire month of August and for the months ahead, both for local and imported goods.

JFC operates the largest food service network in the Philippines. As of June 30, 2014, it was operating 2,244 restaurant outlets in the country: Jollibee brand 839, Chowking 406, Greenwich 207, Red Ribbon 298, Mang Inasal 456 and Burger King 38. Abroad, it was operating 589 stores: Yonghe King (China) 311, Hong Zhuang Yuan (China) 43, San Pin Wang (China) 44, Jollibee 111 (US 30, Vietnam 49, Brunei 12, Saudi Arabia 10, Qatar 4, Kuwait 3, Hong Kong 1 and Singapore 2), Red Ribbon in the US 31, Chowking 46 (US 19, UAE 20, Qatar 5 and Oman 2), Jinja Bar (US) 3. The JFC Group had a total of 2,833 stores worldwide.

JFC also has a 50% interest in joint ventures for the following stores: Highlands Coffee (Vietnam, Philippines) 78, Pho 24 (Vietnam, Indonesia, Philippines, HongKong, Macau and Cambodia) 57, and 12 Sabu (China) 12.

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