Burger King 2012 Annual Report Download - page 11

Table of Contents
continue to build brand leadership in food quality and taste. Product innovation begins with an intensive, data-driven research and development process that
analyzes potential new menu items, including extensive consumer testing and ongoing analysis of the economics of food cost, margin and final price point.
As part of the “Menu” pillar in the U.S. and Canada, we launched four new menu platforms (salads, wraps, smoothies and desserts) and expanded our
chicken, coffee and ancillary menu platforms. In 2013, our menu strategy will focus on enhancing core menu items, such as our great tasting line of burgers,
while also introducing a variety of new products across multiple platforms. We expect to maintain a rigorous pace of new product innovation through the
introduction of new products that will balance premium menu items with value offerings.
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Our operations strategy is designed to drive best-in-class restaurant operations by our franchisees and improve friendliness, cleanliness, speed of service
and overall guest satisfaction to drive long-term growth. We have uniform operating standards and specifications relating to selection of menu items,
maintenance and cleanliness of the premises and employee conduct. In addition, all  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 and holding 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. We require each franchisee’s managing owner and designated restaurant manager to complete
initial and ongoing training programs provided by us, including minimum periods of classroom and on the job training. In the U.S., we and an independent
outside vendor administer the Restaurant Food Safety certification, which is intended to bring heightened awareness to food safety, and includes immediate
follow-up procedures to take any action needed. Additionally, to improve our focus on in-store operations, we use “GUEST TRAC” surveys in the U.S. and
many other countries to assess customer satisfaction with restaurant operations. We have improved our responsiveness to guest experience reporting through a
more user-friendly website.
During 2012, we implemented a field optimization project in the U.S. to significantly increase our field presence to support franchise operations, which
we believe will help improve restaurant operations. We adopted a new field management structure with “Sales, Profit, and Operations Coaches” who work
shoulder-to-shoulder with restaurant teams to increase customer satisfaction, operational efficiency, and franchise profitability. Additionally, we reduced the
number of restaurants managed by each coach to 30, down from 90, to enable coaches to work more closely with franchisees. Additionally, we incentivize our
coaches so their compensation structure is linked to franchise restaurant performance. A coach’s compensation is measured on business performance and
customer satisfaction scores through the GUEST TRAC system to drive sales, profitability and operational excellence across all major indicators of restaurant
performance (friendliness, cleanliness, speed of service and food quality).
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. We grant franchises to operate restaurants using  trademarks, trade dress and other intellectual property, uniform operating
procedures, consistent quality of products and services and standard procedures for inventory control and management. For each franchise restaurant, we
generally enter into a franchise agreement covering a standard set of terms and conditions. Recurring fees consist of monthly royalty and advertising payments.
Franchisees report gross sales on a monthly basis and pay royalties based on reported sales.
Franchise agreements are not assignable without our consent, and we generally have a right of first refusal if a franchisee proposes to sell a restaurant.
Defaults (including non-payment of royalties or advertising
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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