Burger King Franchises

Burger King Franchises

The majority of the locations of international fast-food restaurant chain Burger King are privately owned franchises. While the majority of franchisees are smaller operations, several have grown into major corporations in their own right. At the end of the company's fiscal quarter in September 2012, Burger King reported it had 12,667 outlets in 73 countries; of these, 66 percent are in the United States and 95 percent are privately owned and operated. The company locations employ more than 37,000 people who serve approximately 11.4 million customers daily.

Since its predecessor's inception in 1953, Burger King has used several variations of franchising to expand its operations. In the United States, the company originally relied on a regional franchise model with owners having exclusive expansion rights in a defined geographic territory. This model proved to be problematic as it led to issues of food quality, procedures and image management. A 1970s attempt by one of its largest franchises to take over the chain led to a restructuring of its franchising system, tossing the old method in favor of a restricted, per store licensing model. The 1978 restructuring, led by a new director of operations, firmly placed the mantel of franchise oversight on the shoulders of the company.

While Burger King still utilizes a version of its revamped franchising system in the United States, outside of North America its international locations licenses are still sold on a regional basis with franchises owning exclusive development rights for the region or country. These regional franchises are known as master franchises, and are responsible for opening new restaurants, licensing new third party operators, and performing standards oversight of all restaurant locations in these countries; The largest example of a master franchise is Hungry Jack's, which oversees over 300 restaurants in Australia.

The 2011 purchase of the company by 3G Capital led to a change in how the company interacts with its franchises. The new owners moved to settle any disagreements with its franchises while initiating a sale of the majority of corporate locations with the goal of becoming an exclusive franchisor. The company also entered into several new franchise agreements that will allow it to dramatically expand its presence in several new markets including the BRIC nations. Additionally the company moved to establish new master franchise agreements in several regions while realigning its operations in several markets.