Burger King History

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(History) Burger King was founded in 1953 in Jacksonville, Florida, by Keith J. Kramer and his wife, as Insta-Burger King. The Insta comes from the insta broiler machine that was required in all of its franchises. The birth of the whopper came 3 years later in 1957. Since then Burger king has been sold four times. After being sold to a group of investment firms led by TPG Capital in 2002, Burger King revamped rapidly and had a highly successful initial public offering in 2006. At the end of 2010, Burger King had 12,200 locations in 73 countries, 60% of them in the U.S. and 90% are privately owned. While McDonald’s posted gains of more than 40% in 2011, its performance has been lackluster in 2012 so far. The stock has lost close to 5% in 2012 compared to the S&P 500 index, which has gained more than 10%. The news that CEO Jim Skinner will end his tenure in June 2012 has also created some uncertainty about the company’s future. However, given the company’s strong fundamentals, we believe the stock has a good case for at least for some modest upside. McDonald’s restaurants worldwide are either franchised or company-operated. More than 80% of the 33,000 restaurants worldwide are franchised. In conventional franchised restaurants, McDonald’s owns the land and the franchisee pays the company rent as well as loyalty charges, which is usually a percentage of sales. This is in contrast to a developmental license, where the franchisee owns the land and pays McDonald’s loyalty as a percentage of sales. Both modes of franchising require low capital investments from McDonald’s and ensure healthy revenue generation. McDonald’s has been successful in constantly adding new items to its menu. Outside the U.S., the company ensures that it introduces menu items suited to local tastes. It has also been proactive in adapting its business strategy to changing market conditions. In

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