Burger King 2011 Annual Report Download - page 6

Table of Contents
• Actively pursuing refranchising opportunities: As part of our global portfolio realignment project, we are focused on actively refranchising
Company restaurants to new and existing franchisees to further improve our profitability and cash flow through reduced capital expenditures and
increased royalty revenues.
Global Operations
We operate in four operating segments: (i) the U.S. and Canada; (ii) Europe, the Middle East and Africa, or EMEA; (iii) Latin America and the Caribbean,
or LAC and (iv) Asia Pacific, or APAC. Additional financial information about geographic segments is incorporated herein by reference to Management’s
Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 and Segment Reporting in Part II, Item 8 in Note 19 of this Form
10-K. Our restaurants are limited-service restaurants of distinctive design and are generally located in high-traffic areas. We believe our restaurants appeal to a
broad spectrum of consumers, with multiple day parts appealing to different customer groups.
United States and Canada (U.S. and Canada)
As of December 31, 2011, we had 939 Company restaurants and 6,561 franchise restaurants operating in the U.S. and Canada.
Our Company restaurants in the U.S. and Canada generated $1.2 billion in revenues during 2011, or 75% of our total U.S. and Canada revenues and 50%
of our total worldwide revenues.
We grant franchises to operate restaurants using Burger King trademarks, trade dress and other intellectual property, uniform operating procedures,
consistent quality of products and services and standard procedures for inventory control and management. Our growth and success have been built, in significant
part, upon our substantial franchise operations. We franchised our first restaurant in 1961, and as of December 31, 2011, there were 6,561 franchise restaurants,
owned by 720 franchise operators, in the U.S. and Canada. We earned $397.1 million in franchise and property revenues in the U.S. and Canada during 2011, or
57% of our total worldwide franchise and property revenues. Franchisees report gross sales on a monthly basis and pay royalties based on reported sales.
Europe, the Middle East and Africa (EMEA)
EMEA is the second largest region in the Burger King system behind the United States, as measured by number of restaurants. As of December 31, 2011,
EMEA had 2,882 restaurants in 38 countries and territories, including 192 Company restaurants located in Germany, the U.K., and Spain. While Germany
continues to be the largest market in EMEA with 678 restaurants as of December 31, 2011, Turkey is one of our fastest growing markets with net openings of 72
restaurants during the twelve months ended December 31, 2011. We have expanded our network of restaurants in EMEA over the past few years via contiguous
growth in Central and Eastern Europe and the Middle East and Africa, including entry into the Czech Republic, Russia and Oman. Throughout the EMEA region,
we continue to evaluate opportunities to accelerate development, including through the establishment of master franchisees with exclusive development rights
and joint ventures with new and existing franchisees.
Our Company restaurants in EMEA generated $330.7 million in revenues during 2011, or 63% of our total EMEA revenues and 14% of our total
worldwide revenues.
We earned $194.9 million in franchise and property revenues in EMEA during 2011, or 28% of our total worldwide franchise and property revenues.
Certain EMEA markets, including Hungary and Portugal, are operated by a single franchisee, while others, such as the U.K., Germany and Spain, have multiple
franchisees.
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Source: Burger King Holdings Inc, 10-K, March 14, 2012 Powered by Morningstar® Document Research℠