More than a third of Burger King’s locations are outside the United States. That number growing as the company shifts its expansion focus to other countries. In the past year, 90 percent of its new locations were built abroad.
Chidsey declined to comment on specific strategies, deferring to 3G Capital. He also declined to comment on potential efforts to cut costs, including possible layoffs. Messages left for 3G Capital weren’t returned but the company told franchisees and investors in a letter on its website that it plans to invest in the brand and highlighted opportunities in Asia and Latin America. Burger King’s headquarters will remain in Miami.
Burger King has more than 12,100 locations around the world and perennially lags behind its far larger competitor McDonald’s Corp. It struggled to keep up with its rival during the economy’s roller coaster of the past two years.
Its biggest problem: high unemployment among its most important, but notoriously fickle, group of customers — men between 18 and 34, whom it has targeted with big burgers like the 930-calorie BK Quad Stacker and edgy ads featuring the creepy King character.
But there are deeper reasons for five consecutive quarters of declines in sales at locations open at least a year.
Burger King’s once-unique concept of flame-broiled burgers isn’t so rare any more, thanks to a boom in gourmet hamburgers from smaller competitors such as Five Guys and Culver’s. And its profits suffer from trying to match McDonald’s super-low prices, which has angered franchisees.
“McDonald’s is just eating their lunch,’’ said Bob Goldin, an analyst at the food consulting firm Technomic Inc. “Burger King’s very heavily focused on a core audience of the younger male. And with that group, their attention goes to whoever has a better deal or whatever is hotter.’’
Analysts say Burger King needs a new approach with the help of its new owner, including becoming more efficient and differentiating itself from McDonald’s by creating new menu items that will keep customers coming back.
Under the terms of yesterday’s deal, a 46 percent premium over the company’s stock price before rumors of a buyout circulated, 3G Capital Managing Partner Alex Behring will join Chidsey as cochairman.
The two said the deal has a $4 billion value including the debt.
3G Capital is expected to begin its effort to acquire the outstanding shares by Sept. 17.
Burger King shares rose $4.62, or 24.5 percent, to $23.48 in afternoon trading yesterday.
