Burger King 2009 Annual Report Download - page 12

Table of Contents
Property Operations
Our property operations consist of restaurants where we lease the land and often the building to the franchisee. Our real estate
operations in the United States and Canada generated $88.1 million of our property revenues in fiscal 2009, or 78% of our total
worldwide property revenues.
For properties that we lease from third−party landlords and sublease to franchisees, leases generally provide for fixed rental
payments and may provide for contingent rental payments based on a restaurant’s annual gross sales. Franchisees who lease land only
or land and building from us do so on a “triple net” basis. Under these triple net leases, the franchisee is obligated to pay all costs and
expenses, including all real property taxes and assessments, repairs and maintenance and insurance. As of June 30, 2009, we leased or
subleased to franchisees in the United States and Canada 941 properties, of which we own 441 properties and lease either the land or the
land and building from third−party landlords on the remaining 500 properties.
Europe, the Middle East and Africa/Asia Pacific (EMEA/APAC)
Restaurant Operations
EMEA. EMEA is the second largest geographic area in the Burger King system behind the United States, as measured by number
of restaurants. As of June 30, 2009, EMEA had 2,580 restaurants in 31 countries and territories, including 278 Company restaurants
located in Germany, the U.K., Spain, The Netherlands and Italy. Germany is the largest market in EMEA with 668 restaurants as of
June 30, 2009.
APAC. As of June 30, 2009, APAC had 733 restaurants in 13 countries and territories, including China, Malaysia, Thailand,
Australia, Philippines, Singapore, New Zealand, South Korea, Indonesia, and Japan. All of the restaurants in the region are franchised
other than our 16 Company restaurants in China and one Company restaurant in Singapore. Australia is the largest market in APAC,
with 327 restaurants as of June 30, 2009, all of which are franchised and operated under Hungry Jack’s ®, a brand that we own in
Australia and New Zealand. Australia is the only market in which we operate under a brand other than Burger King. We believe there is
significant potential for growth in APAC, particularly in our existing markets of China, Japan, Taiwan, Hong Kong and Malaysia and in
new markets such as Indonesia.
Our restaurants located in EMEA/APAC generally adhere to the standardized operating procedures and requirements followed by
U.S. restaurants. However, regional and country−specific market conditions often require some variation in our standards and
procedures. Some of the major differences between our United States and Canada and EMEA/APAC operations are discussed below.
Management Structure. Our EMEA headquarters are located in Zug, Switzerland and our APAC headquarters are located in
Singapore. In addition, we operate restaurant support centers located in Madrid, London, Munich, Istanbul, Rotterdam and Gothenburg
(for EMEA), Singapore and Shanghai (for APAC). These centers are staffed by teams who support both franchised operations and
Company restaurants.
Menu and Restaurant Design. Restaurants must offer certain global Burger King menu items. In many countries, special products
developed to satisfy local tastes and respond to competitive conditions are also offered. Many restaurants are located in smaller,
attached buildings without a drive−thru or in food courts, rather than free−standing buildings. In addition, the design, facility size and
color scheme of the restaurant building may vary from country to country due to local requirements and preferences. We and our
franchisees have opened 125 new restaurants with the smaller building designs in EMEA/APAC through June 30, 2009. In addition,
during fiscal 2009 we opened our first Whopper Bar in EMEA in Munich, Germany.
New Restaurant Development. Unlike the United States and Canada, where all new development must be approved by the
development committee, our market planning and site selection process in EMEA/APAC is managed by our regional teams, who are
knowledgeable about the local market. In several of our markets, there is typically a single franchisee that owns and operates all of the
restaurants within a country. We have identified opportunities for extending the reach of the Burger King brand in most of our existing
markets in EMEA and APAC. Over the past two years our franchisees opened restaurants in three new markets in EMEA/APAC:
Romania, Bulgaria and the Czech Republic. We are also considering the possibility of entering into additional EMEA/APAC
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