Burger King 2013 Annual Report Download - page 6

Table of Contents
• . The strength of our menu has been built on our distinct flame-grilled cooking platform to make better tasting burgers. During
2013, we adopted a multi-tier balanced approach to value and premium offerings by pairing value promotions, such as the $1 Fry
Burger, with premium limited time offerings such as the Angry Whopper® sandwich and Chipotle Whopper® sandwich. In the third
quarter of 2013, we introduced Satisfries™, a first of its kind better-for-you French fry. We will continue to optimize our menu by
focusing on our core products, such as our flagship Whopper sandwich, while maintaining a balance between value promotions and
premium limited time offerings to drive sales and traffic.
• . We have established a data driven marketing process which is focused on driving restaurant sales and
traffic, while targeting a broader consumer base with more inclusive messaging. We have launched a food-centric marketing strategy with
the tagline Taste Is King®, which we believe will refocus our consumers on our food, which is our core asset. We will be using multiple
touch points to advertise our products, including digital advertising, social media and on-line video. We believe that this food-centric
marketing strategy will allow us to strike a balance between value promotions and premium limited time offerings to drive profitable
restaurant sales and traffic.
• . We believe that improving restaurant operations and enhancing the customer experience are key components to increasing the
profitability of the Burger King system. As part of our franchisee-focused approach to our business, we have implemented standardized
restaurant crew training and restructured our field teams to significantly increase our field presence and more closely align the
compensation of these field teams with restaurant performance.
• . We believe that re-imaged Burger King restaurants increase curb appeal and result in increased customer sales. Our goal is to
have 40% of our U.S. and Canada Burger King restaurants on a modern image by the end of 2015. We have lowered the cost of
remodeling restaurants by improving the supply chain and providing franchisees with financial incentives, and we will continue to work
on initiatives to reduce the cost of restaurant remodels. We have provided franchisees with access to third-party financing programs to
assist them in their remodeling efforts. Re-imaged restaurants have experienced a sales uplift of approximately 10-15% on average,
providing our franchisees with the opportunity to achieve an attractive return on their investment.
•  : We believe that international development is one of the principal drivers of long-term growth of the
business and value for our shareholders. We seek to accelerate our international growth by:
• creating strategic joint ventures with accelerated development targets, in which we retain a meaningful minority equity interest; and
• entering into master franchise and development agreements with experienced local operators.
Generally, these strategic arrangements grant one or more franchisees the exclusive right to develop and manage Burger King restaurants in a specific
country or region. We have focused our international expansion plans predominantly in high-growth emerging markets where we believe our current
penetration is low relative to our potential. We believe this strategy will permit us to capitalize on under-penetrated markets and rising middle class
consumer spending.
Since we started to implement this strategy, we have successfully entered into international development and joint venture agreements in high-growth
markets such as Brazil, China, Russia and South Africa that we believe have created a platform for sustainable long-term unit development. During
2013, we established joint ventures in Mexico, India and France and granted exclusive master franchise and development rights for each market. In each
joint venture we typically pair a proven local operator with a strong financial partner while retaining an equity stake. Also during 2013, we entered into
master franchise and development agreements with franchisees in Canada, Finland, the Netherlands, Pakistan, and Sri Lanka, and we are actively
seeking strategic partners to accelerate our international expansion in other countries.
•  : We are committed to managing our corporate-level G&A through our “Zero Based Budgeting”
program. This annual planning method is designed to build a strong ownership culture by requiring departmental budgets to estimate and justify
costs and expenditures from a “zero base,” rather than focusing on the prior year’s base. As part of our commitment, we tie a significant portion of
incentive compensation specifically to our G&A budget.
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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