Burger King Case Study

Burger King Case Study

Burger King Case Study

Introduction

Burger King Corporation (BKC) is one of the world's leading fast food restaurants. It operates more than 11,925 restaurants in 73 countries and the US territories, of which 1,429 restaurants are company restaurants and 10,496 are owned by independent franchisees. Out of these 7,233 restaurants are located in the US and 4,692 are located in international markets. The company's business is divided into three geographic segments; the US and Canada; Europe, the Middle East, Africa and Asia Pacific (EMEA/APAC); and Latin America. About 7,512 BKC restaurants are located in the US and Canada. Over 2,580 of the company's restaurants are located in Europe, Middle East and Africa (EMEA), 733 restaurants in Asia Pacific (APAC) and 1,078 restaurants in Latin America. The chain offers a range of burgers, sandwiches, salads and breakfast items including flame-broiled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks and other food items. BKC introduced drive-thru service which now accounts for almost 62% of the US company restaurant business. The company generates revenues from three sources: sales at company restaurants, royalties and franchise fees and property income from certain franchise restaurants that lease or sub lease property from the company.

Question 1:

BKC enjoys a strong market position with 11,925 restaurants operating in 73 countries and US territories. It is the world's second-largest FFHR chain as measured by the total number of restaurants and system-wide sales. The company holds about 14% of the FFHR market in the US. In addition, it is the leader in 14 of the 27 countries and territories in which it operates in Latin America, including Mexico and Puerto Rico, in terms of number of restaurants.

Question 2:

BKC has a higher percentage of franchise stores in the FFHR business. The company has 90% of franchise stores. As a result of its higher franchise mix, the company is able to grow with minimal capital expenditure and is assured of regular income in the form of fees and royalties. Additionally, BKC expects its new restaurant growth to come from franchisees. Consequently, the company's development strategy focuses on ensuring that franchisees have the resources and incentives to grow. As part of this strategy, BKC developed new, smaller restaurant designs that reduce the level of capital investment required, while also addressing a change in consumer preference from dine-in to drive-thru (62% of US Company restaurant ...