Burger King 2009 Annual Report Download - page 17

Table of Contents
Friendly & Fast operations platforms principally through Guest TracSM, a rating system based on survey data submitted by our
customers.
We review the overall performance of our operations platforms through an Operations Excellence Review, or OER, which focuses
on evaluating and improving restaurant operations and guest satisfaction.
All Burger King restaurants are required to be operated in accordance with quality assurance and health standards which we
establish, as well as standards set by federal, state and local governmental laws and regulations. These standards include food
preparation rules regarding, among other things, minimum cooking times and temperatures, sanitation and cleanliness.
We closely supervise the operation of all of our Company restaurants to help ensure that standards and policies are followed and
that product quality, guest service and cleanliness of the restaurants are maintained. Detailed reports from management information
systems are tabulated and distributed to management on a regular basis to help maintain compliance. In addition, we conduct scheduled
and unscheduled inspections of Company and franchise restaurants throughout the Burger King system.
Intellectual Property
As of June 30, 2009, we owned approximately 2,980 trademark and service mark registrations and applications and approximately
1,040 domain name registrations around the world, some of which are of material importance to our business. Depending on the
jurisdiction, trademarks and service marks generally are valid as long as they are used and/or registered. We also have established the
standards and specifications for most of the goods and services used in the development, improvement and operation of Burger King
restaurants. These proprietary standards, specifications and restaurant operating procedures are trade secrets owned by us. Additionally,
we own certain patents relating to equipment used in our restaurants and provide proprietary product and labor management software to
our franchisees. Patents are of varying duration.
Competition
We operate in the FFHR category of the QSR segment within the broader restaurant industry. Our two main domestic competitors
in the FFHR category are McDonald’s Corporation, or McDonald’s, and Wendy’s/Arby’s Group, Inc., or Wendy’s. To a lesser degree,
we compete against national food service businesses offering alternative menus, such as Subway, Yum! Brands, Inc.’s Taco Bell, Pizza
Hut and Kentucky Fried Chicken, casual restaurant chains, such as Applebee’s, Chili’s, Ruby Tuesday’s and “fast casual” restaurant
chains, such as Panera Bread, as well as convenience stores and grocery stores that offer menu items comparable to that of Burger King
restaurants. We compete on the basis of product choice, quality, affordability, service and location.
Our largest U.S. competitor, McDonald’s, has significant international operations. Non−FFHR based chains, such as KFC and
Pizza Hut, have many outlets in international markets that compete with Burger King and other FFHR chains. In addition, Burger King
restaurants compete internationally against local FFHR chains, sandwich shops, bakeries and single−store locations.
Government Regulation
We are subject to various federal, state and local laws affecting the operation of our business, as are our franchisees. Each Burger
King restaurant is subject to licensing and regulation by a number of governmental authorities, which include zoning, health, safety,
sanitation, building and fire agencies in the jurisdiction in which the restaurant is located. Difficulties in obtaining, or the failure to
obtain, required licenses or approvals can delay or prevent the opening of a new restaurant in a particular area.
In the United States, we are subject to the rules and regulations of the Federal Trade Commission, or the FTC, and various state
laws regulating the offer and sale of franchises. The FTC and various state laws require that we furnish to certain prospective
franchisees a franchise disclosure document containing prescribed information. A number of states, in which we are currently
franchising, regulate the sale of franchises and require registration of the franchise disclosure document with state authorities and the
delivery of a franchise disclosure document to prospective franchisees. We are currently operating under exemptions from registration
in several of these states
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