Burger King – Franchise Review

Burger King Franchise burger

The first Burger King restaurant, founded in 1954 by James McLamore and David Edgerton, was opened in Miami. Often popularly abbreviated BK, it is a worldwide fast food chain mainly consisting of hamburger dishes and delicacies. Burger King exists under a parent company known as Burger King Holdings. It operates nearly 40 global subsidiaries that manage franchise operations, acquisitions and financial responsibilities and has its headquarters based in Miami-Dade County, Florida, close to Miami.

One of its subsidiaries is the Burger King Brands, Inc. responsible for the smooth operation of Burger King’s intellectual assets. Established in 1990, it owns and manages all the domain names, copyrights as well as trademarks that are used by the Burger King restaurants in the US and Canada. It also provides market oriented services to its parent company.

The main products of Burger King are hamburgers, chicken, french fries, soft drinks, salads, desserts and milk shakes. Burger King began franchising in 1959 whereby it utilized a regional model where franchisees bought rights to open shops within a specific geographic region. This method resulted into a compromising situation whereby there was little oversight control and store regulation implementation of the quality of products, Buy burgerking franchise in india design and image. Between 1970 and the first half of the 1980’s, there have even been lawsuits with regard to the overall control of the franchises.

After this lawsuit, there was restructuring done for future franchising agreements to make them more restricted and preventing corporations from owning franchises. The policies also disallowed the franchisees from owning other chains that would result in diversion of funds from Burger King. It made sure that the size of franchisees was not that big and that Burger King was the primary owner of new locations where the stores were to be set up putting them in a position where they would be able to lease or rent the restaurant too its franchisee, and evict or take over management operations of restaurants that did not conform to their guidelines.

The ownership of Burger King however changed hands again and the strict policies were not adhered to which led to financial ruin and straining associations between the franchises. After almost 18 years without financial growth, the value of the company began feeling the effects of its stagnating franchises. AmeriKing filed for bankruptcy in 2001 and this caused the depreciation of the fast food chain by nearly $750 million during its sale.

The new CEO, Bradely Blum began a restructuring program that was aimed to revive almost 20% of franchises undergoing financial difficulties. It was an initiative that encouraged individual owners who took advantage of the situation buying the failed stores and turning them into profit makers. A majority of the once failing stores are growing and at the end of the 2010 fiscal year, Burger King claimed to have more than 12,200 outlets in 73 countries. 90% of the outlets in the US are privately owned and operated.

The total investment of a Burger King franchise falls between $294,000 to $2.8 million with a franchising fee of $50,000. It has a 20 year renewable term of agreement contract which requires a franchisee to have a net worth of $1.5 million and a cash liquidity of $500,000. Industry experience with general business experience and marketing skills are necessary.

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Most people are not aware that 80% of ALL franchise endeavours fail in the first two to five years leaving large debts looming for years thereafter.

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