McDonald's plans to expand in Guam, FSM, and Palau; NMI expansion halted
BY MARK RABAGO Saipan Correspondent
DANDAN, Saipan — Longtime McDonald's franchise owner Jose C. Ayuyu said he is continuing expansion in Guam, announcing plans to break ground on a new restaurant later this year. He plans to put further development in Saipan on hold, due to the NMI’s ongoing economic downturn.
Ayuyu, president and CEO of McDonald’s of Guam and Saipan; confirmed that the next McDonald’s Guam location will likely begin construction between August and September and will be strategically located.
“The opportunity is a lot greater if the restaurants are outside the base,” he said. “The new one will be somewhere close to [Marine Corps] Camp Blaz, near the military development. That’s where growth is.”
The upcoming restaurant will be Ayuyu’s third in Guam since his family acquired the Guam McDonald’s operations from the corporation in 2016. He had previously opened restaurants in Yigo, and on Dec. 11 in Mangilao, bringing the total to seven.
McDonald's Mangilao. From Journal Files
Ayuyu's acquisition of all McDonald's restaurants in Guam —previously owned by McDonald's Corp. — was a strategic move intended to safeguard his business amid growing concerns over Saipan's long-term economic viability.
“I told myself then, if anything were to happen to the Saipan economy, it's best I have a backup plan, so I can continue to be in business,” he said.
The franchise relocated to more accessible sites from its restaurants on military bases. Ayuyu said Guam’s economy remains resilient and continues to improve slowly, helped in large part by military investments. “Guam is where our opportunity to grow is right now. We continue to hire more people there. That’s where we’re focusing,” he said.
In Saipan, Ayuyu is taking a wait-and-see approach. He said that while he previously considered expanding in San Antonio or expanding the freestanding McDonald’s in Garapan, both plans are on hold due to market conditions.
“The economy is not in good shape, so I’m putting those plans on the shelf for now,” he said. “Garapan is tough; the properties are too small. I need at least 5,000 square meters to accommodate a drive-through. I’m trying to consolidate four to five lots, but it’s a big investment.”
Saipan’s shrinking population, dwindling tourist arrivals, and prolonged economic stagnation have created a challenging environment for business growth. Ayuyu described the current climate as the worst he has seen in decades.
“It's a really tough market,” he said. “The CNMI is highly dependent on tourism and federal dollars. It’s going to take tourism years to recover — hope I’m wrong. In the meantime, companies are downsizing or closing shop. It's a bleak picture.”
Despite the challenges, Ayuyu has so far avoided layoffs at his Saipan locations, opting instead for gradual attrition and tight cost control. His son, Joe E. Ayuyu Jr., currently manages both the Saipan and Guam operations. “We don’t plan on laying anyone off just yet, but we do have a contingency plan in case it becomes absolutely necessary,” Jose Ayuyu said.
Looking ahead, Ayuyu said his long-term ambition is to bring McDonald’s to other parts of Micronesia — specifically Palau and Pohnpei — once economic conditions and infrastructure improve.
“It’s just going to take some time for these islands to develop their economies. But we can wait,” he said. “I shared this vision with my son, and I expect him to execute it in the future.”
The decision to focus resources in more stable markets stems from experience and long-term planning. Ayuyu started the Saipan McDonald's franchise in 1992 and spent five years growing the operation before expanding again.
As one of the CNMI’s most seasoned business figures, Ayuyu offered blunt advice to those trying to start or sustain businesses in the CNMI.
“Buckle up for a long, bumpy ride,” he said. “Run your business as efficiently as you can. Do your homework. Start small if possible — limit your losses.”
He also urged the community to embrace the U.S. military presence as a potential economic stabilizer.
“The military is the only part of the U.S. government immune from budget cuts. They bring in fresh money, and that money can help fund our local government and services,” he said. “Guam and Honolulu benefit massively from the military. Without it, they’d be in trouble too. We should promote tourism, yes, but we know it’s not a reliable industry.”
For Ayuyu, the future lies in a diversified strategy — building where there's opportunity and protecting what’s already built.
“I’m no longer interested in politics. I made the right decision to stay in business for my family,” he said. “But we need to create an environment where businesses feel they can grow again. Until then, we wait and manage smartly.” mbj
