Chinese fast food chain restaurant Malan Noodle is in talks to set up a joint venture with a Hong Kong-based catering company in a bid to seek faster development.

The co-operation has been basically fixed, the China Business News reported yesterday.

Malan's corporate planning manager, Xiao, confirmed the news yesterday, saying the final deal may come out by the end of next week.

But Xiao refused to give further details.

The two sides will hold a 50 per cent stake in the joint venture, the China Business News said, but did not give the name of the Hong Kong company.

The report claimed that in the first two years, the Hong Kong side will appoint a general manager to take charge of the corporate management, while Malan will nominate a chairman for the venture.

The two sides will take the management role by turns every two years.

"The reason for this co-operation is for the advanced management experience (of the Hong Kong company)," the China Business News quoted Liu Yawen, Malan's general manager, as saying.

Established in 1995, Malan has developed quickly. It now has 463 stores, including 134 directly operated outlets, 302 franchises and three overseas restaurants in the United States, Singapore and Indonesia.

Its sales exceeded 400 million yuan (US$48.3 million) last year.

But the restaurant, ranked "the No 1 brand of Chinese fast food" by the China Chain Store & Franchise Association in 2000, has always been at a disadvantage when competing with big foreign rivals like KFC and McDonald's.

Today, there are more than 1,300 KFC restaurants and nearly 700 McDonald's around the country.

Industry insiders contributed the success of Western fast food restaurants partly to their standardized management.

"Things in all our restaurants are standardized, from restaurant decoration to raw material supply, from food quality to services," said Wang Qun, public affairs director of Yum! Restaurants China, the owner of KFC restaurants.