Burger King 2012 Annual Report Download - page 7

Table of Contents
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As of December 31, 2012, we had 7,293 franchise restaurants and 183 Company restaurants in the U.S. and Canada, as compared to 6,561 and
939, respectively, as of December 31, 2011. During 2012, we refranchised 752 restaurants in the U.S. and Canada, bringing the region to 98% franchised as
of December 31, 2012. In connection with the refranchising to Carrols Restaurant Group, Inc., our largest franchisee (“Carrols”), we received cash, a 28.9%
equity interest in Carrols and board seats. During 2012, we also continued to implement our Four Pillars strategy to improve comparable sales growth and
franchise profitability by enhancing our Menu, Marketing Communications, Image, and Operations. We believe that this approach will enable us to deliver an
enjoyable customer experience and improve the attractiveness of our brand to current and prospective franchisees by driving positive, profitable sales growth.
The table below sets forth our restaurant portfolio in the U.S. and Canada as of December 31, 2012 and 2011:

 

US 7,183 7,204
Canada 293 296
  

EMEA is the second largest region, as measured by number of restaurants. As of December 31, 2012, we had 2,989 franchise restaurants and 132
Company restaurants in EMEA, as compared to 2,690 and 192, respectively, as of December 31, 2011. While Germany continues to be the largest market in
EMEA with 684 restaurants as of December 31, 2012, Turkey and Russia are two of our fastest growing markets with net openings of 78 restaurants and 47
restaurants, respectively, during 2012. During 2012, we refranchised all of our Company restaurants in the United Kingdom, bringing the region to 96%
franchised. We plan to refranchise our remaining Company restaurants in Germany and Spain during 2013. We will continue to evaluate opportunities to
accelerate development, including through the establishment of master franchises with exclusive development rights and joint ventures with new and existing
franchisees. We believe there are significant growth opportunities throughout the EMEA region.
As part of our international growth strategy, we entered into several important agreements in 2012:
•  In June 2012, we entered into a joint venture agreement in Russia to accelerate unit development in this attractive growth market. We
partnered with VTB Capital, the investment arm of Russia’s second largest bank, and Burger King’s largest Russian franchisee, Burger Rus. We
granted exclusivity and sub-franchising rights in the Russian market to the joint venture, and received a minority equity stake and board seats,
without deploying our own capital.
•  In November 2012, we entered into a joint venture agreement with Grand Parade Investments, Ltd. (GPI), a leading operator of
hospitality, gaming and leisure companies in the region, to develop the  brand in South Africa. We believe Sub-Saharan Africa
represents an attractive long-term growth opportunity, and this agreement will enable Burger King to begin building its brand in the region. We
granted the joint venture exclusive development and sub-franchising rights in the country and received a minority equity stake without deploying
our own capital. The opening of the first restaurant is planned for Cape Town in 2013.
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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