Revived and Remodelling Burger King Sees Long-Term...

Tag : Dessert Rose

In a presentation given at a conference in Boston on Tuesday,Burger King CEO, John Chidsey, told investors that he expects hiscompany’s positive momentum to continue.
The restaurant operator’s efforts to launch new products -which has generated over USD 5 billion in sales in the last 3 years- and boost various marketing campaigns over the past four yearsare beginning to materialise in the company’s financialperformance.
Besides the numerous new customer offerings and continued effortsto expand in the breakfast, beverage and dessert segments, BurgerKing also spotted the changing attitude of the American consumer.As the majority people order their burgers and fries via drive-ins(estimated by Burger King at 65% of total fast food consumers) andabout 15% of consumers enter restaurants to take away, thecompany’s outlets were too large to accommodate the remaining1 in 5 customers.
By reducing building size, and by carrying out a series of whatChidsey describes as “remodels” and“scrapes”, Burger King estimates that it now recordsabout 25-30% less cost from its restaurants.
Burger King has tripled the number of its restaurants being builtin the US in just 2 years and the CEO sees the number double againby FY 2010. However, as Burger King depends on its franchisees(which own about 90% of its restaurants) to rebuild, it is only nowthat the company can invest after recording profit growth.
According to Chidsey, a “scrape” costs about USD 1-1.2million, whereas a “remodel” costs approximately USD600,000. As a result the majority of franchisees are opting for thelatter. Currently, Burger King remodels about 66% of itsrestaurants.