With Burger King's New Development Comes Improved Franchisee Relationships

In a recent article posted over the weekend, the Chief Executive of Burger King was quoted saying,"We've cleaned up a lot of issues and really built ourselves a very solid foundation from which it is much easier to grow."  One issue he refers to is the company's relationship with its franchisees. John Chidsey said in the Associated Press interview that when he came into the company in March 2004, he gave the relationship issue in the U.S. a two or three. Now he says it's probably more like eight to nine.

Steve Wiborg, president and CEO of Heartland Food, Burger King's second largest franchisee, agreed. He said that since the private equity groups took over in May 2006, franchisees are welcoming a consistent message from BK's management team instead of looking to the National Franchisee Association.

Burger King has been riddled with management changes and problems in dealing with the NFA over the years. Since it went public, they have seen the stock double since last August, reporting 13 consecutive quarters of positive comparable sales growth. Average restaurant sales of $1.17 million for a 12-month period ending March 31 are an all-time high, according to the article.  And, the stock price has doubled.

In September 2005, Chidsey pulled no punches in chastising the leadership of the then-18 year-old NFA franchisee group, as he laid out the troubling issues of the franchisor/franchisee relationship. The NFA at that time represented over 80 percent of the franchised restaurants in the system and almost 90 percent of individual Burger King franchisees.

Telephone call to the NFA and to Burger King's three larges6t franchisees were not returned in time for this posting.

Developing story . . .