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‘King’ revamps for global conquest

Rico Gagliano Oct 7, 2009
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‘King’ revamps for global conquest

Rico Gagliano Oct 7, 2009
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Kai Ryssdal: Burger King made a royal proclamation today. The company said that over the next few years, it’ll be revamping the decor in most of its restaurants. Less beige, more flame-y blacks and reds. There will be brick on the walls, and industrial metal on the countertops. Marketplace’s Rico Gagliano explains why and whether franchisees are having it their way.


RICO GAGLIANO: Burger King made the announcement at its restaurant in Amsterdam’s Schiphol airport. And Tom Miner, of food industry consultants Technomics, says the choice of location was symbolic.

TOM MINER: They’re looking for this new design to position them very aggressively in global markets.

Markets like Europe and Asia, where Burger King hasn’t been as aggressive as McDonald’s and KFC.

MINER: The attributes of this new store, it’s gonna fit what Europeans and Asians have in mind as to what an American hamburger restaurant should be like.

And Miner says the new decor also features more restaurant-style seating — an attempt to help Burger Kings here in the U.S. compete with dine-in chains like Chipotle. But BK says the redesigns could cost as much as $600,000 bucks a store. Are franchisees gonna pony up? Burger King’s Brian Geiss thinks so.

BRIAN GEISS: We actually have a number of franchisees that have adopted the design already, and they’ve all been very pleased with the results. We typically see a double-digit sales lift.

A lift of 12 to 15 percent, according to Geiss. But Morningstar analyst R.J. Hottovy says those figures sound a little high. And he expects owners will be skeptical, too.

R.J. HOTTOVY: Frankly I think this might be tough sell for certain franchisees. We’re dealing with a tough sales environment, a lot of cost increases.

BK says franchise owners will have options if they can’t afford a total overhaul. But the company says owners are contracted to maintain quote “a modern image.”

In Los Angeles, I’m Rico Gagliano for Marketplace.

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