Burger King franchises
Encyclopedia
The majority of the locations of international fast-food restaurant chain
Burger King
are privately owned, or franchised. While the majority of franchises own single locations, several have grown into major corporations in their own right. At the end of its fiscal year 2008, Burger King reported that there are more than 11,550 outlets in 71 countries; 66% are in the United States and 90% are privately owned and operated. The company locations employ more than 37,000 people who serve approximately 11.4 million customers daily.
Since its inception in 1952, Burger King has used several variations of franchising
to expand its operations. In the United States, the company originally relied on a regional franchise model with owners having exclusive expansion rights in a defined geographic territory. This model proved to be problematic as it led to issues of food quality, procedures and image management. A 1970s attempt by one of its largest franchises to take over the chain led to a restructuring of its franchising system, tossing the old method in favor of a restricted, per store licensing model. The 1978 restructuring, led by a new director of operations, firmly placed the mantel of franchise oversight on the shoulders of the company.
While Burger King still utilizes it revamped franchising system in the United States, outside of North America its international locations licenses are still sold on a regional basis with franchises owning exclusive development rights for the region or country. These regional franchises are known as master franchise
s, and are responsible for opening new restaurants, licensing new third party operators, and performing standards oversight of all restaurant locations in these countries; The largest example of a master franchise is Hungry Jack's
, which oversees over 300 restaurants in Australia.
as Insta-Burger King. The original founders and owners, Kieth J. Kramer and his wife's uncle Matthew Burns, opened their first stores around a piece of equipment known as the Insta-Broiler. The Insta-Broiler oven proved so successful at cooking burgers, they required all of their franchises to carry the device. The rights to open stores in Miami, Florida belonged to two businessmen named James McLamore and David R. Edgerton. In 1954, McLamore and Edgarton were operating several locations with in the Miami-Dade area and growing at a fast clip when they decided to replace the Insta-Broiler with a mechanized gas grill they called a flame broiler. Even though the company had rapidly expanded throughout the state until its operations totaled more than 40 locations in 1955, the original Insta-Burger King ran into financial difficulties and the pair of McLamore and Edgarton purchased the national rights to the chain and rechristened the company as Burger King of Miami.
When McLamore and Edgarton's Burger King Corporation began a full franchising system in 1961, it relied on a regional franchising model where franchisees would purchase the right to open stores within a defined geographic region. These franchise agreements granted the company very little oversight control over its franchisees and resulted in issues of product quality control, store image and design and operations procedures.
In 1967, after eight years of private operation, the Pillsbury Company acquired the Burger King brand and its parent company Burger King Corporation. At the time of the purchase, the chain had grown to 274 restaurants in the United States. Pillsbury continued to grow the company utilizing the existing franchise system despite its flaws. The power of its independent franchises came to a head in 1973 when Chart House, owner of 350 restaurants and one of its largest franchise groups, attempted to purchase the chain from Pillsbury for $100 million (USD) which Pillsbury declined. When Chart House's bid failed, its owners Billy and Jimmy Trotter put forth a second plan that would require Pillsbury and Chart House spin off their respective holdings and merge the two entities into a separate company. Again Pillsbury declined the proposed divestiture. After the failed attempts to acquire the company, the relationship with Chart House and the Trotters soured; when Chart House purchased several restaurants in Boston and Houston in 1979, Burger King sued the selling franchisees for failing to comply with the right of first refusal
clause in their contracts. Burger King won the case, successfully preventing the sale. The two parties did eventually reach a settlement where Chart House kept the Houston locations in their portfolio. Chart House eventually spun off its Burger King holdings and refocused on its higher end chains; its Burger King holding company, DiversiFoods, was eventually acquired by Pillsbury $390 million (USD) in 1984 and folded into Burger King's operations.
The regional licensing model remained in place until 1978 when the company hired McDonald's
executive Donald N. Smith to help revamp the company. Smith initiated a restructuring of all future franchising agreements, disallowing new owners from living more than an hours drive from their restaurants, preventing corporations from owning franchises and prohibiting franchisees from operating other chains. This new policy effectively limited the size of franchisees and prevented larger franchises from challenging Burger King as Chart House had. Smith also altered the way company company dealt with new properties by making the company the primary owner of new locations and rent or lease the restaurants to its franchises. This policy would allow the company to take over the operations of failing stores or evict those owners who would not conform to the company guidelines and policies. However, by 1988 Burger King parent Pillsbury had relaxed many of Smith's changes, scaled back on construction of new locations and stalling growth. When Pillsbury was acquired in 1989 by Grand Metropolitan PLC, the company fell further into decline, a pattern which continued under Grand Met successor Diageo
. This institutionalized neglect further hurt the standing of the brand, in turn causing significant financial damage to Burger King's franchises.
By 2001 and nearly eighteen years of stagnant growth, many of its franchises were in some sort of financial distress. The lack of growth severely impacted Burger King's largest franchise, the nearly 400-store AmeriKing; the company, which until this point had been struggling under a nearly $300 million debt load and been shedding stores across the US, was forced to enter Chapter 11
bankruptcy. The failure of AmeriKing deeply affected the value of the company, and put negotiations between Diaego and the TPC Capital-lead group on hold. The developments eventually forced Diaego to lower the total selling price by almost three-quarters of a billion dollars. After the sale, newly appointed CEO Bradley Blum initiated a program to help the roughly 20% of its franchises, including its four largest, who were in financial distress, bankruptcy or had ceased operations altogether. Partnering with the California-based Trinity Capital, LLC, the company established the Franchisee Financial Restructuring Initiative, a program to address the financial issues facing BK's financially distressed franchisees. The initiative was designed to assist franchisees in restructuring their businesses in order to meet financial obligations, focus on restaurant operational excellence, reinvest in their operations and return to profitability.
Individual owners also took advantage of the AmeriKing failure; one of the BK regional owners, Miami-based Al Cabrera, purchased 130 stores located primarily in the Chicago and the upper mid-west, from the failed company for a bargain basement price of $16 million, or approximately 88% of their original value. The new company, which started out as Core Value Partners and eventually became Heartland Foods
, also purchased 120 additional stores from distressed owners and completely revamped them. The resulting purchases made Mr. Cabrerra BKB's largest minority franchisee and Heartland one of Burger King's top franchises. By 2006, the company was valued at over $150 million, and was sold to New York-based GSO Capital Partners
. Other purchasers included a three-way group of NFL athletes Kevin Faulk
, Marcus Allen
and Michael Strahan
who collectively purchased 17 stores in the cities of Norfolk and Richmond, Virginia; and Cincinnati-based franchisee Dave Devoy, who purchased 32 AmeriKing stores. After investing in new decor, equipment and staff retraining, many of the formerly failing stores have shown growth upwards of 20%.
, property
and casualty insurance
. In 2001, the group announced a plan to purchase Burger King from then-parent Diageo after the company put forth a plan to float approximately 20% of BKC on the NYSE. The NFA believed that any money raised from the issue would not be put into helping bolster the then flagging BK, but would instead end up being used to help Diageo bolster its liquor brands. The deal collapsed when the NFA was unable to put together an acceptable financing package.
Although the majority of the restaurant locations are privately held by individual owners and its financial dependence on those owners, Burger King's relationship with its franchises has not always been harmonious. Occasional spats between the two have caused numerous issues, and in several instances the company's and its licensees' relations have degenerated into precedent-setting court cases.
In a 2005 dispute with its the NFA over issues including brand development and advertising, Burger King severed its relations with the group. Claiming that the NFA was resisting structural changes that BK was making in regards to pricing, hours and its new gift card program, CEO John Chindsey claimed many instances of the NFA's non-cooperation and affirmative disruption of efforts to improve the Burger King system. were the reason for the break. The company also announced that it would be diverting a $1 million (USD) NFA advertising subsidy into the company's own advertising fund. In a response, the NFA chairman Daniel Fitzpatrick responded in a letter to Burger King's parent stating that to sever relations with the ... NFA is extremely regrettable" and based on "an erroneous set of facts, innuendo and rumor. and claimed that the company owed the NFA $1.7 million in total subsidy funds. The two sides settled their differences in April 2006 when Burger King agreed to pay the disputed subsidy funds to the group. Additionally, Burger King announced that it would honor an October 2004 deal in regards to compensation for the operation of the annual Burger King/franchise convention.
The Army and Air Force Exchange Service (AAFES) is a specialty retailer that operates military retail stores on US Army
and Air Force
bases and installations across the world. Burger King was the first restaurant chain to be opened on US military facilities with a location at the US Naval
base at Pearl Harbor
, however naval facilities are covered by the Navy Exchange Service Command (NEXCOM)
. The AAFES opened its first Burger King franchise 1984 at the American military facilities in Ansbach
, Germany. The location was the first restaurant opened under a five-year agreement, with a fifteen-year extension, in which the AAFES agreed it would open 185 locations globally. Since that time the AAFES has opened nearly 200 locations in all theaters of operations of the two services. Almost all of the AAFES-operated Burger King restaurants are found on army posts and air force bases; however some locations, such as the one located at the Baghdad International Airport
, are within territories under US military jurisdiction.
The AAFES group was given Burger King's first Award of Excellence in 2002 for the company what it called "its [AAFES] ceaseless efforts to support U.S. servicemen and women deployed to locations around the world in support of the war on terrorism." As the end of Burger King's 2010 fiscal year, AAFES is the fourth largest US franchisee of the chain with 132 restaurants globally.
Carrols Corporation was founded in 1960 as a franchisee of the Tastee Freeze Company's Carrols Restaurants division by Herb Slotnick under the name Carrols Drive-In Restaurants of New York, and by 1968 the company had grown to the point where it purchased the chain from Tastee Freeze. By 1974 Carrols owned and operated over 150 Carrols Club restaurants in the Northeast United States and abroad. In 1975 the company entered into a franchise agreement with Burger King and converted its existing Carrols restaurants in the US into BK locations, closed those stores that were not able to be updated and sold off its international operations.
As the end of Burger King's 2010 fiscal year, Carrols is the largest US franchisee of the chain with 309 restaurants in New York, Ohio
, and ten other states.
along and its partner Kuwait-based MH Alshaya Group, is the exclusive master franchisee for the Middle East and North Africa, excluding Israel and Turkey. Hana also operates two holding companies, the Olayan Food Services Company in Saudi Arabia and First Food Services Company in the UAE as well as an operations support/training center in Riyadh
.
Hana first began operating Burger King restaurants in the region after its parent company Olayan completed its franchise agreement in 1991. Its first location opened in Riyadh in December, 1992, and expanded across the Middle East opening stores in the neighboring countries of Kuwait, Qatar, Bahrain, and Lebanon in 2001. By 2007, the company had grown to over 180 locations in a half dozen countries, all located in Southwest Asia, when it signed an additional franchise agreement to open locations in North Africa, with the first location in Cairo
, Egypt.
Hana currently owns and operates or sub-licenses over 200 restaurants on the Arabian peninsula
, Jordan, Lebanon and Egypt. To accommodate the tenets of the majority Islamic population's faith in its markets, all of the locations operated and overseen by Hana feature halal
meats and do not feature pork based products, additionally hamburgers are called beefburgers, avoiding the term ham
and its association with pork.
Hungry Jack's, often colloquially abbreviated to HJ's, is the exclusive Australian master fast food franchisee of Burger King
Corporation. Its parent company is Hungry Jack's Pty Ltd which is a wholly owned subsidiary of Competitive Foods Australia
, a privately held company owned by Jack Cowin
.
When Burger King decided to expand its operations into Australia, it found that its business name was already trademarked
by a man running a small takeaway
food shop in Adelaide
. Thus, BK was forced to change the name when it decided to open stores in the country – the only time this has happened in its corporate history. Burger King provided the Australian franchisee, Jack Cowin
, with a list of possible alternative names that the Australian Burger King restaurants could be branded as. The names were derived from pre-existing trademarks already registered by Burger King and its then corporate parent Pillsbury. Cowin selected the Hungry Jack brand name, one of Pillsbury's US pancake
mixture products, and slightly changing the name to the possessive form, Hungry Jack's. Accordingly, the first Australian franchise of the Burger King, established in Perth
in 1971, was branded as Hungry Jack's.
Hungry Jack's currently owns and operates or sub-licenses all of the Hungry Jack's restaurants in Australia. As the master franchise for the continent, the company is responsible for licensing new operators, opening its own stores and performing standards oversight of franchised locations in Australia. As the end of Burger King's 2010 fiscal year, Hungry Jack's is the largest Asian/Pacific franchisee of the chain with 276 restaurants directly owned by parent company Hungry Jack's Pty and 67 more third party licensees.
Chain store
Chain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practices. These characteristics also apply to chain restaurants and some service-oriented chain businesses. In retail, dining and many service categories, chain businesses...
Burger King
Burger King
Burger King, often abbreviated as BK, is a global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County, Florida, United States. The company began in 1953 as Insta-Burger King, a Jacksonville, Florida-based restaurant chain...
are privately owned, or franchised. While the majority of franchises own single locations, several have grown into major corporations in their own right. At the end of its fiscal year 2008, Burger King reported that there are more than 11,550 outlets in 71 countries; 66% are in the United States and 90% are privately owned and operated. The company locations employ more than 37,000 people who serve approximately 11.4 million customers daily.
Since its inception in 1952, Burger King has used several variations of franchising
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
to expand its operations. In the United States, the company originally relied on a regional franchise model with owners having exclusive expansion rights in a defined geographic territory. This model proved to be problematic as it led to issues of food quality, procedures and image management. A 1970s attempt by one of its largest franchises to take over the chain led to a restructuring of its franchising system, tossing the old method in favor of a restricted, per store licensing model. The 1978 restructuring, led by a new director of operations, firmly placed the mantel of franchise oversight on the shoulders of the company.
While Burger King still utilizes it revamped franchising system in the United States, outside of North America its international locations licenses are still sold on a regional basis with franchises owning exclusive development rights for the region or country. These regional franchises are known as master franchise
Master franchise
A master franchise is a person or entity who provides services to franchisees in a specified territory, typically a major market, geographical region or even one or more countries.Master franchising is a method that has been employed by most franchise systems...
s, and are responsible for opening new restaurants, licensing new third party operators, and performing standards oversight of all restaurant locations in these countries; The largest example of a master franchise is Hungry Jack's
Hungry Jack's
Hungry Jack's Pty Ltd, often colloquially abbreviated to HJ's, Hungry's or Hungie's, is the exclusive Australian master fast food franchisee of Burger King Corporation. It is a wholly owned subsidiary of Competitive Foods Australia, a privately held company owned by Jack Cowin...
, which oversees over 300 restaurants in Australia.
History
The company known today as Burger King itself began as a franchise; the predecessor of Burger King was founded in 1953 in Jacksonville, FloridaJacksonville, Florida
Jacksonville is the largest city in the U.S. state of Florida in terms of both population and land area, and the largest city by area in the contiguous United States. It is the county seat of Duval County, with which the city government consolidated in 1968...
as Insta-Burger King. The original founders and owners, Kieth J. Kramer and his wife's uncle Matthew Burns, opened their first stores around a piece of equipment known as the Insta-Broiler. The Insta-Broiler oven proved so successful at cooking burgers, they required all of their franchises to carry the device. The rights to open stores in Miami, Florida belonged to two businessmen named James McLamore and David R. Edgerton. In 1954, McLamore and Edgarton were operating several locations with in the Miami-Dade area and growing at a fast clip when they decided to replace the Insta-Broiler with a mechanized gas grill they called a flame broiler. Even though the company had rapidly expanded throughout the state until its operations totaled more than 40 locations in 1955, the original Insta-Burger King ran into financial difficulties and the pair of McLamore and Edgarton purchased the national rights to the chain and rechristened the company as Burger King of Miami.
When McLamore and Edgarton's Burger King Corporation began a full franchising system in 1961, it relied on a regional franchising model where franchisees would purchase the right to open stores within a defined geographic region. These franchise agreements granted the company very little oversight control over its franchisees and resulted in issues of product quality control, store image and design and operations procedures.
In 1967, after eight years of private operation, the Pillsbury Company acquired the Burger King brand and its parent company Burger King Corporation. At the time of the purchase, the chain had grown to 274 restaurants in the United States. Pillsbury continued to grow the company utilizing the existing franchise system despite its flaws. The power of its independent franchises came to a head in 1973 when Chart House, owner of 350 restaurants and one of its largest franchise groups, attempted to purchase the chain from Pillsbury for $100 million (USD) which Pillsbury declined. When Chart House's bid failed, its owners Billy and Jimmy Trotter put forth a second plan that would require Pillsbury and Chart House spin off their respective holdings and merge the two entities into a separate company. Again Pillsbury declined the proposed divestiture. After the failed attempts to acquire the company, the relationship with Chart House and the Trotters soured; when Chart House purchased several restaurants in Boston and Houston in 1979, Burger King sued the selling franchisees for failing to comply with the right of first refusal
Right of first refusal
Right of first refusal is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party...
clause in their contracts. Burger King won the case, successfully preventing the sale. The two parties did eventually reach a settlement where Chart House kept the Houston locations in their portfolio. Chart House eventually spun off its Burger King holdings and refocused on its higher end chains; its Burger King holding company, DiversiFoods, was eventually acquired by Pillsbury $390 million (USD) in 1984 and folded into Burger King's operations.
The regional licensing model remained in place until 1978 when the company hired McDonald's
McDonald's
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 64 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by the eponymous Richard and Maurice McDonald; in 1948...
executive Donald N. Smith to help revamp the company. Smith initiated a restructuring of all future franchising agreements, disallowing new owners from living more than an hours drive from their restaurants, preventing corporations from owning franchises and prohibiting franchisees from operating other chains. This new policy effectively limited the size of franchisees and prevented larger franchises from challenging Burger King as Chart House had. Smith also altered the way company company dealt with new properties by making the company the primary owner of new locations and rent or lease the restaurants to its franchises. This policy would allow the company to take over the operations of failing stores or evict those owners who would not conform to the company guidelines and policies. However, by 1988 Burger King parent Pillsbury had relaxed many of Smith's changes, scaled back on construction of new locations and stalling growth. When Pillsbury was acquired in 1989 by Grand Metropolitan PLC, the company fell further into decline, a pattern which continued under Grand Met successor Diageo
Diageo
Diageo plc is a global alcoholic beverages company headquartered in London, United Kingdom. It is the world's largest producer of spirits and a major producer of beer and wine....
. This institutionalized neglect further hurt the standing of the brand, in turn causing significant financial damage to Burger King's franchises.
By 2001 and nearly eighteen years of stagnant growth, many of its franchises were in some sort of financial distress. The lack of growth severely impacted Burger King's largest franchise, the nearly 400-store AmeriKing; the company, which until this point had been struggling under a nearly $300 million debt load and been shedding stores across the US, was forced to enter Chapter 11
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
bankruptcy. The failure of AmeriKing deeply affected the value of the company, and put negotiations between Diaego and the TPC Capital-lead group on hold. The developments eventually forced Diaego to lower the total selling price by almost three-quarters of a billion dollars. After the sale, newly appointed CEO Bradley Blum initiated a program to help the roughly 20% of its franchises, including its four largest, who were in financial distress, bankruptcy or had ceased operations altogether. Partnering with the California-based Trinity Capital, LLC, the company established the Franchisee Financial Restructuring Initiative, a program to address the financial issues facing BK's financially distressed franchisees. The initiative was designed to assist franchisees in restructuring their businesses in order to meet financial obligations, focus on restaurant operational excellence, reinvest in their operations and return to profitability.
Individual owners also took advantage of the AmeriKing failure; one of the BK regional owners, Miami-based Al Cabrera, purchased 130 stores located primarily in the Chicago and the upper mid-west, from the failed company for a bargain basement price of $16 million, or approximately 88% of their original value. The new company, which started out as Core Value Partners and eventually became Heartland Foods
Heartland Foods
Heartland Foods is one of the largest franchises of Burger King. The Downers Grove, Illinois-based company owns and operates over 225 restaurants in six US States.- History :...
, also purchased 120 additional stores from distressed owners and completely revamped them. The resulting purchases made Mr. Cabrerra BKB's largest minority franchisee and Heartland one of Burger King's top franchises. By 2006, the company was valued at over $150 million, and was sold to New York-based GSO Capital Partners
GSO Capital Partners
GSO Capital Partners is one of the largest credit-oriented alternative asset managers in the world and a major participant in the leveraged finance marketplace....
. Other purchasers included a three-way group of NFL athletes Kevin Faulk
Kevin Faulk
Kevin Troy Faulk is an American football running back for the New England Patriots of the National Football League. He was drafted by the Patriots in the second round of the 1999 NFL Draft. He played college football at LSU.As of 2010, Faulk is the longest-tenured current member of the Patriots,...
, Marcus Allen
Marcus Allen
Marcus LeMarr Allen is a former American football player and, until recently, was affiliated with CBS as a game analyst. As a professional, Allen ran for 12,243 yards and caught 587 passes for 5,412 yards during his career for both the Los Angeles Raiders and the Kansas City Chiefs from 1982 to 1997...
and Michael Strahan
Michael Strahan
Michael Anthony Strahan is a former National Football League defensive end who played his entire career for the New York Giants; a career where he set the record for the most sacks in a single season and won a Super Bowl in his final year. He is currently a football analyst on Fox NFL Sunday, and...
who collectively purchased 17 stores in the cities of Norfolk and Richmond, Virginia; and Cincinnati-based franchisee Dave Devoy, who purchased 32 AmeriKing stores. After investing in new decor, equipment and staff retraining, many of the formerly failing stores have shown growth upwards of 20%.
Relations
In the United States, approximately 90% of Burger King's franchises have banded together to form the Burger King National Franchise Association (BKNFA or NFA). The 900-member group is based in Atlanta, Georgia, and is designed to provide what the group calls Franchisee Relations Advocacy. It acts as a corporate negotiator that mediates with corporate-franchise disputes, as a government lobbying group to deal with issues that effect the fast-food industry as a whole, and it provides group healthHealth insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
, property
Property insurance
Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main...
and casualty insurance
Casualty insurance
Casualty insurance, often equated to liability insurance, is used to describe an area of insurance not directly concerned with life insurance, health insurance, or property insurance. It is mainly used to describe the liability coverage of an individual or organization's for negligent acts or...
. In 2001, the group announced a plan to purchase Burger King from then-parent Diageo after the company put forth a plan to float approximately 20% of BKC on the NYSE. The NFA believed that any money raised from the issue would not be put into helping bolster the then flagging BK, but would instead end up being used to help Diageo bolster its liquor brands. The deal collapsed when the NFA was unable to put together an acceptable financing package.
Although the majority of the restaurant locations are privately held by individual owners and its financial dependence on those owners, Burger King's relationship with its franchises has not always been harmonious. Occasional spats between the two have caused numerous issues, and in several instances the company's and its licensees' relations have degenerated into precedent-setting court cases.
In a 2005 dispute with its the NFA over issues including brand development and advertising, Burger King severed its relations with the group. Claiming that the NFA was resisting structural changes that BK was making in regards to pricing, hours and its new gift card program, CEO John Chindsey claimed many instances of the NFA's non-cooperation and affirmative disruption of efforts to improve the Burger King system. were the reason for the break. The company also announced that it would be diverting a $1 million (USD) NFA advertising subsidy into the company's own advertising fund. In a response, the NFA chairman Daniel Fitzpatrick responded in a letter to Burger King's parent stating that to sever relations with the ... NFA is extremely regrettable" and based on "an erroneous set of facts, innuendo and rumor. and claimed that the company owed the NFA $1.7 million in total subsidy funds. The two sides settled their differences in April 2006 when Burger King agreed to pay the disputed subsidy funds to the group. Additionally, Burger King announced that it would honor an October 2004 deal in regards to compensation for the operation of the annual Burger King/franchise convention.
Army and Air Force Exchange Service
The Army and Air Force Exchange Service (AAFES) is a specialty retailer that operates military retail stores on US Army
United States Army
The United States Army is the main branch of the United States Armed Forces responsible for land-based military operations. It is the largest and oldest established branch of the U.S. military, and is one of seven U.S. uniformed services...
and Air Force
United States Air Force
The United States Air Force is the aerial warfare service branch of the United States Armed Forces and one of the American uniformed services. Initially part of the United States Army, the USAF was formed as a separate branch of the military on September 18, 1947 under the National Security Act of...
bases and installations across the world. Burger King was the first restaurant chain to be opened on US military facilities with a location at the US Naval
United States Navy
The United States Navy is the naval warfare service branch of the United States Armed Forces and one of the seven uniformed services of the United States. The U.S. Navy is the largest in the world; its battle fleet tonnage is greater than that of the next 13 largest navies combined. The U.S...
base at Pearl Harbor
Pearl Harbor
Pearl Harbor, known to Hawaiians as Puuloa, is a lagoon harbor on the island of Oahu, Hawaii, west of Honolulu. Much of the harbor and surrounding lands is a United States Navy deep-water naval base. It is also the headquarters of the U.S. Pacific Fleet...
, however naval facilities are covered by the Navy Exchange Service Command (NEXCOM)
Base exchange
A Base Exchange is a type of retail store operating on United States military installations worldwide...
. The AAFES opened its first Burger King franchise 1984 at the American military facilities in Ansbach
Ansbach
Ansbach, originally Onolzbach, is a town in Bavaria, Germany. It is the capital of the administrative region of Middle Franconia. Ansbach is situated southwest of Nuremberg and north of Munich, on the Fränkische Rezat, a tributary of the Main river. As of 2004, its population was 40,723.Ansbach...
, Germany. The location was the first restaurant opened under a five-year agreement, with a fifteen-year extension, in which the AAFES agreed it would open 185 locations globally. Since that time the AAFES has opened nearly 200 locations in all theaters of operations of the two services. Almost all of the AAFES-operated Burger King restaurants are found on army posts and air force bases; however some locations, such as the one located at the Baghdad International Airport
Baghdad International Airport
Baghdad International Airport, originally Saddam International Airport, , BIAP is Iraq's largest airport, located in a suburb about west of downtown Baghdad in the Baghdad Governorate...
, are within territories under US military jurisdiction.
The AAFES group was given Burger King's first Award of Excellence in 2002 for the company what it called "its [AAFES] ceaseless efforts to support U.S. servicemen and women deployed to locations around the world in support of the war on terrorism." As the end of Burger King's 2010 fiscal year, AAFES is the fourth largest US franchisee of the chain with 132 restaurants globally.
Carrols Corporation
Carrols Corporation is the largest global franchisee of Burger King. Its parent company is Carrols Restaurant Group, at publicly traded corporation . It has held this position since 2002 with the bankruptcy of Chicago-based AmeriKing Inc, which had 367 US locations at its peak.Carrols Corporation was founded in 1960 as a franchisee of the Tastee Freeze Company's Carrols Restaurants division by Herb Slotnick under the name Carrols Drive-In Restaurants of New York, and by 1968 the company had grown to the point where it purchased the chain from Tastee Freeze. By 1974 Carrols owned and operated over 150 Carrols Club restaurants in the Northeast United States and abroad. In 1975 the company entered into a franchise agreement with Burger King and converted its existing Carrols restaurants in the US into BK locations, closed those stores that were not able to be updated and sold off its international operations.
As the end of Burger King's 2010 fiscal year, Carrols is the largest US franchisee of the chain with 309 restaurants in New York, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
, and ten other states.
Hana International
Hana International, is a wholly owned subsidiary of the Saudi Arabia-based Olayan GroupOlayan Group
The Olayan Group , is a Saudi conglomerate established in 1947 by Sulaiman S. Olayan and his son Khaled S. Olayan . The Olayan Group traces its origins back to the General Contracting Company , founded to work on the construction of the Trans-Arabian Pipeline alongside the American contracting...
along and its partner Kuwait-based MH Alshaya Group, is the exclusive master franchisee for the Middle East and North Africa, excluding Israel and Turkey. Hana also operates two holding companies, the Olayan Food Services Company in Saudi Arabia and First Food Services Company in the UAE as well as an operations support/training center in Riyadh
Riyadh
Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to 5,254,560 people, and the urban center of a...
.
Hana first began operating Burger King restaurants in the region after its parent company Olayan completed its franchise agreement in 1991. Its first location opened in Riyadh in December, 1992, and expanded across the Middle East opening stores in the neighboring countries of Kuwait, Qatar, Bahrain, and Lebanon in 2001. By 2007, the company had grown to over 180 locations in a half dozen countries, all located in Southwest Asia, when it signed an additional franchise agreement to open locations in North Africa, with the first location in Cairo
Cairo
Cairo , is the capital of Egypt and the largest city in the Arab world and Africa, and the 16th largest metropolitan area in the world. Nicknamed "The City of a Thousand Minarets" for its preponderance of Islamic architecture, Cairo has long been a centre of the region's political and cultural life...
, Egypt.
Hana currently owns and operates or sub-licenses over 200 restaurants on the Arabian peninsula
Arabian Peninsula
The Arabian Peninsula is a land mass situated north-east of Africa. Also known as Arabia or the Arabian subcontinent, it is the world's largest peninsula and covers 3,237,500 km2...
, Jordan, Lebanon and Egypt. To accommodate the tenets of the majority Islamic population's faith in its markets, all of the locations operated and overseen by Hana feature halal
Halal
Halal is a term designating any object or an action which is permissible to use or engage in, according to Islamic law. The term is used to designate food seen as permissible according to Islamic law...
meats and do not feature pork based products, additionally hamburgers are called beefburgers, avoiding the term ham
Ham
Ham is a cut of meat from the thigh of the hind leg of certain animals, especiallypigs. Nearly all hams sold today are fully cooked or cured.-Etymology:...
and its association with pork.
Hungry Jack's
Burger King
Burger King, often abbreviated as BK, is a global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County, Florida, United States. The company began in 1953 as Insta-Burger King, a Jacksonville, Florida-based restaurant chain...
Corporation. Its parent company is Hungry Jack's Pty Ltd which is a wholly owned subsidiary of Competitive Foods Australia
Competitive Foods Australia
Competitive Foods Australia Pty Ltd is the largest franchiser of restaurants in Australia. It is owned and operated by Jack Cowin. Its units include Hungry Jack's, KFC and Domino's Pizza.- Holdings :...
, a privately held company owned by Jack Cowin
Jack Cowin
Jack Cowin is an Australian businessman who owns Hungry Jack's, the Burger King franchise in Australia and is the Executive Chairman of Competitive Foods Australia, one of the country's largest privately held businesses...
.
When Burger King decided to expand its operations into Australia, it found that its business name was already trademarked
Australian trademark law
Australian trade mark law is based on the Trade Marks Act 1995 , which is administered by IP Australia, an Australian government agency within the Department of Industry, Tourism and Resources....
by a man running a small takeaway
Takeaway
Takeaway can refer to:* Take-out food* The Takeaway , an American public radio morning news show* Turnover * Turnover * Subtraction—an alternative name...
food shop in Adelaide
Adelaide
Adelaide is the capital city of South Australia and the fifth-largest city in Australia. Adelaide has an estimated population of more than 1.2 million...
. Thus, BK was forced to change the name when it decided to open stores in the country – the only time this has happened in its corporate history. Burger King provided the Australian franchisee, Jack Cowin
Jack Cowin
Jack Cowin is an Australian businessman who owns Hungry Jack's, the Burger King franchise in Australia and is the Executive Chairman of Competitive Foods Australia, one of the country's largest privately held businesses...
, with a list of possible alternative names that the Australian Burger King restaurants could be branded as. The names were derived from pre-existing trademarks already registered by Burger King and its then corporate parent Pillsbury. Cowin selected the Hungry Jack brand name, one of Pillsbury's US pancake
Pancake
A pancake is a thin, flat, round cake prepared from a batter, and cooked on a hot griddle or frying pan. Most pancakes are quick breads; some use a yeast-raised or fermented batter. Most pancakes are cooked one side on a griddle and flipped partway through to cook the other side...
mixture products, and slightly changing the name to the possessive form, Hungry Jack's. Accordingly, the first Australian franchise of the Burger King, established in Perth
Perth, Western Australia
Perth is the capital and largest city of the Australian state of Western Australia and the fourth most populous city in Australia. The Perth metropolitan area has an estimated population of almost 1,700,000....
in 1971, was branded as Hungry Jack's.
Hungry Jack's currently owns and operates or sub-licenses all of the Hungry Jack's restaurants in Australia. As the master franchise for the continent, the company is responsible for licensing new operators, opening its own stores and performing standards oversight of franchised locations in Australia. As the end of Burger King's 2010 fiscal year, Hungry Jack's is the largest Asian/Pacific franchisee of the chain with 276 restaurants directly owned by parent company Hungry Jack's Pty and 67 more third party licensees.