Burger King

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In 2002, Burger King an iconic American brand with franchise outlets in more than 60 countries around the world met with crisis with competition. Nearly one-quarter of the company’s restaurants were in financial distress. Revenues and profits per outlet were falling, driving contentious relations between the company and franchisees.  

Using private equity funding, Burger King managed to change their ownership from Diageo.BurgerKing’s U.S. comparable store sales increased for eight consecutive quarters,and average sales per restaurant climbed 11 percent. The company also began building smaller restaurants, which reduced construction costs by approximately25 percent.  

In May 2006, the company’s private equity investors took Burger King public, listing on the NewYork Stock Exchange under the ticker symbol BKC. After four years under private equity investor management:  

Outcome:

1. 98 percent of restaurants were financially sound

2. Total revenues grew to a record $2.05 billion in 2006 from $1.66 billion in 2002

3. Average annual store sales in the U.S. and Canada reached a record $1.2 million

4. Comparable sales in the U.S. and Canada grew nine successive quarters after dropping in each of the previous seven years

5. Net income hit $27 million

6. Debt fell from $1.3 billion to $285 million   Burger King never look back and operates more than 11,200 restaurants in more than 60 countries. The private equity sponsors continue to retain a 56 percent stake in Burger King.