Elaboration case study: Burger King


Term Paper, 2011

21 Pages, Grade: 2,0

Alesia Denker (Author)


Excerpt

Inhalt

List of figures

1 Business description

2 Initial Investment

3 Franchise Agreement

4 Advantages and disadvantages of Burger King as franchise system

5 Burger King
5.1 Burger King general informations
5.2 International expansion of franchise

6 Why Russia?
6.1 Russian Resturant Industry
6.2 Russian Fast Food Market

7 Timing - Strategy

8 Opportunities in Eastern Europe

References

List of figures

Figure 1: Investment Tables

Figure 2: Ongoing Fees

Figure 3: BK's worldwide attendance

Figure 4: Global Ranking Business competition - No.3 BK

Figure 5: BK a Global Player with US Focus

Figure 6: Open Potential in the russian fast food market (in million)

Figure 7: Timing Strategies

Figure 8: BK advertising

1 Business description

Burger King Corporation (BKC) is a Florida corporation based in Miami. BKC operates and grants franchises to operate quick-service hamburger restaurants using certain trademarks, service marks and trade names and procedures for inventory control and management.1

Franchise Offer: There are 3 types of franchises offered:

Institutional Locations: "Institutional locations" include government buildings and facilities, medical facilities, airports, train and bus stations, sports facilities, factories, corporate campuses, turnpikes, limited access toll roads, theme parks, zoos and educational facilities.

Traditional Burger King Restaurant Facility: A self-contained, full size Burger King Restaurant which is located and operated on a site as a freestanding building or within another building structure such as a shopping mall. A Traditional Burger King Restaurant does not share any common areas with any other businesses and serves the standard approved menu for Burger King Restaurants.

Non-Traditional Burger King Facility: A Burger King Restaurant may be located at a site which includes other businesses, such as retail, food service, gas stations, convenience stores, other franchised businesses or restaurants or other similar facilities.2

2 Initial Investment

Investment Tables3:

illustration not visible in this excerpt

Ongoing Fees4:

illustration not visible in this excerpt

Figure 2: Ongoing Fees

3 Franchise Agreement

When you decide to join the Burger King industry, you will be required to sign a contract. Logically this assumes that you will have to agree with the Burger King franchise agreement.5

The Franchise Agreement is the legal document that governs the franchisee/ franchisor relationship. There is no standard format for a Franchise Agreement because the terms and conditions and operations vary from franchise to franchise and industry to industry. In general, Franchise Agreements cover the following main provisions6:

1. Training and/or ongoing support provided by the franchisor. Each franchisor has its own training program for franchisees and their staff, which can include training done at the franchisee's location or at the corporate headquarters or a combination. Most franchisors offer ongoing support including administrative and technical support.
2. Assigned territory. Your Franchise Agreement will designate the territory in which you will operate and whether or not you have exclusivity rights.
3. Duration of the Franchise Agreement. This provision states the length of the agreement.
4. Franchise fee and total anticipated investment. Franmchisees are required to pay an initial franchise fee that grants them the right to use the franchisor's trademark and operating system.
5. Trademark, patent, and signage use. This provision covers how a franchisee can use the franchisor's trademark, patent and signage.
6. Royalties and other fees you are ecpected to pay. Most franchisors require franchisees to pay an ongoing royalty, usually a percentage of total sales, typically on a monthly basis.
7. Advertising. The franchisor will reveal its advertising commitment and what fees franchisees are required to pay towards those costs. 8. Operating protocol. This section details how francisees run their outlets.
9. Renewal rights and franchisee termination/ cancellation policies. These provisions deal with how the franchise can be renewed or terminated. Some franchisors have an Arbitration Clause in the Franchise Agreemnet, which means that if legal action on either side is warranted, an arbitrator will review the case of going to court.
10. Resale rights. Some franchisors allow franchisees to sell their franchises for whatever reason. Many, however, write in buy back or right of first refusal clauses, which allow the franchisor to buy back the franchise at a rate determined by them or to match any potential buyer's offer who has expressed interest in buying your franchise.

Franchise Agreement enclose

4 Advantages and disadvantages of Burger King as franchise system

Buying a franchise can be a quick way to set up your own business without starting from scratch. But there are also a number of drawbacks.

Advantages:

- Your business is based on a proven idea. You can check how successful other franchises are before committing yourself.
- You can use a recognised brand name and trade marks. You benefit from any advertising or promotion by the owner of the franchise - the 'franchisor'.
- The franchisor gives you support - usually including training, help setting up the business, a manual telling you how to run the business and ongoing advice.
- You usually have exclusive rights in your territory. The franchisor won't sell any other franchises in the same territory.
- Financing the business may be easier. Banks are sometimes more likely to lend money to buy a franchise with a good reputation.
- You can benefit from communicating and sharing ideas with, and receiving support from, other franchisees in the network.
- Relationships with suppliers have already been established.7

Disadvantages:

- Admition fee: US$ 50,000
- Investment: US$ 1.5 million
- Costs may be higher than you expect. As well as the initial costs of buying the franchise, you pay monthly: royalty fee: 4,5% of gross sale plus advertising contribution: 4% of gross sale.
- you may have to agree to buy products from the franchisor.

[...]


1 Burger King

2 franchiseexpo

3 monster

4 monster

5 franchisedirect

6 franchise-network

7 franchises

Excerpt out of 21 pages

Details

Title
Elaboration case study: Burger King
College
Westfälische Hochschule Gelsenkirchen, Bocholt, Recklinghausen
Course
International Marketing
Grade
2,0
Author
Year
2011
Pages
21
Catalog Number
V184536
ISBN (eBook)
9783656096955
ISBN (Book)
9783656096870
File size
519 KB
Language
English
Tags
elaboration, burger, king, russia, marketing, international marketing, international management, franchise, timing strategy, fast food, sprinkler strategy, waterfall strategy, burger king, market, global, fh bocholt, fh gelsenkirchen
Quote paper
Alesia Denker (Author), 2011, Elaboration case study: Burger King, Munich, GRIN Verlag, https://www.grin.com/document/184536

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