Burger King 2012 Annual Report Download - page 4

Table of Contents
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Burger King Worldwide, Inc. (“BKW”, the “Company” or “we”) is a Delaware corporation formed on April 2, 2012 and the indirect parent of Burger
King Corporation (“BKC”), a Florida corporation that franchises and operates fast food hamburger restaurants, principally under the  brand.
We are the world’s second largest fast food hamburger restaurant, or FFHR, chain as measured by the total number of restaurants. As of December 31, 2012,
we owned or franchised a total of 12,997 restaurants in 86 countries and U.S. territories. Of these restaurants, 418 were Company restaurants and 12,579,
or approximately 97% of all  restaurants, were owned by our franchisees. Our restaurants are limited service restaurants that feature flame-grilled
hamburgers, chicken and other specialty sandwiches, french fries, soft drinks and other affordably-priced food items. We believe our restaurants appeal to a
broad spectrum of consumers, with multiple day parts appealing to different customer groups. During our more than 50 years of operating history, we have
developed a scalable and cost-efficient quick service hamburger restaurant model that offers customers fast, delicious food at affordable prices.
We generate revenues from three sources: (1) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise
restaurants and fees paid by franchisees, (2) property income from properties that we lease or sublease to franchisees and (3) retail sales at Company
restaurants.
We believe that we can deliver value to our shareholders and enhance the  brand by focusing our efforts on the stewardship of our brand.
We currently have a higher percentage of franchise restaurants than our major competitors in the FFHR category, and our goal is to transition to a nearly 100%
franchised business model. We believe that our franchise-dominated business model will increase our profitability and cash flow since the capital required to
expand our restaurant portfolio and re-image and maintain existing Burger King restaurants will principally be provided by our franchisees. Furthermore, we
believe that our shift away from significant restaurant ownership will permit us to focus on narrowing the average restaurant sales gap with our peers, through
menu innovation, franchisee operational support and brand development.
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We were founded in 1954 when James McLamore and David Edgerton opened the first  restaurant in Miami, Florida and in 1957 we
introduced our signature  sandwich. In October 2010 we were acquired by 3G Capital Special Situations Fund II, L.P. (“3G”), which is controlled
by 3G Capital Partners, Ltd., an investment firm based in New York (“3G Capital”). On June 20, 2012, upon our merger with a subsidiary of Justice
Holdings Limited (“Justice”), we changed our name to Burger King Worldwide, Inc. and listed our shares on the New York Stock Exchange under the symbol
“BKW”.
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We operate in the FFHR category of the quick service restaurant, or QSR, segment of the restaurant industry. In the United States, the QSR segment is
the largest segment of the restaurant industry and has demonstrated steady growth over a long period of time. According to The NPD Group, Inc. (“NPD
Group”), which prepares and disseminates CREST data, QSR consumer spending has grown at an annual rate of 3% over the past 10 years, totaling
approximately $248 billion for the 12-month period ended November 2012.
According to NPD Group, the FFHR category is the largest category in the QSR segment, generating consumer spending of $72.0 billion in the United
States for the 12-month period ended November 2012, representing 29% of total QSR consumer spending. According to NPD Group, for the 12-month period
ended November 2012,  accounted for approximately 12% of total FFHR consumer spending in the United States.
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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