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Analyzing Burger King's Business Strategy and Financial Performance in the QSR Industry

This report delves into Burger King's position as the world's second-largest fast food hamburger restaurant and its strategic framework within the competitive quick service restaurant (QSR) sector. Covering key aspects such as its global refranchising strategy, revenue breakdown, and operational challenges, the analysis highlights Burger King's journey from its origins in the 1950s through multiple ownership changes to its current market standing. Insights into financial metrics, asset management, and liabilities provide a thorough understanding of the brand's success and challenges.

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Analyzing Burger King's Business Strategy and Financial Performance in the QSR Industry

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Presentation Transcript

  1. Mod X: Incorporating additional informationJake Peng

  2. Agenda • Introduction • Expansion of items in F/S

  3. An overview of the QSR industry • Fast Food Hamburger Restaurants (FFHR) • High competitive • High volume, low margin • Compete on cost leadership and market penetration Restaurant industry ($1.75 trillion) Fine dining Quick service restaurant “Fast casual” Others

  4. Comparison

  5. Overview of Burger King • World’s 2nd largest FFHR • 13,660 restaurants in 80+ countries • 1.1 billion in revenues, 234 million net income in 2013 • Brief history • Started in 1950s; changed hands several times • Acquired from Diageo by a P/E consortium in 2002 and first went public in 2006 • Acquired by 3G Capital in Oct. 2010 and went public again in Jun. 2012

  6. Global refranchising strategy • Sell Company restaurants to franchisees • Started in 2011, completed in 2013 • % Franchised stores up from 89% (2010) to 99.6%(2013) • Only retained 52 own stores in Florida for new product testing • Benefit • Avoid capital commitment • Focus on marketing, food innovation, and global expansion

  7. Revenue breakdown (2013)

  8. Consolidated B/S - Asset • Largest three items: • Intangibles (including G/W) • Cash • PPE

  9. Prepaids and other assets

  10. PPE

  11. Intangibles

  12. Other asset (non-current)

  13. Consolidated B/S - Liability • Observation: • Minimal ST debt, but significant LT debt • Highly leveraged – A/L ratio 74%

  14. Other current liabilities (accrued liabilities)

  15. Other liabilities (non-current)

  16. Pensions On B/S In Notes

  17. Deferred tax

  18. Deferred tax

  19. Income Statement

  20. Revenues

  21. SG&A

  22. Other operating loss

  23. Questions?

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