Burger King
Date of Incorporation: 1956
Franchising Since: 1956
Headquarters: Miami, Florida
Country: U.S.
Business Description: Burger King Corporation (BKC) is a Florida corporation based in Miami. BKC operates and grants franchises to operate quick-service hamburger restaurants using certain trademarks, service marks and trade names and procedures for inventory control and management.
Franchise Offer: There are 3 types of franchises offered:
Institutional Locations: "Institutional locations" include government buildings and facilities, medical facilities, airports, train and bus stations, sports facilities, factories, corporate campuses, turnpikes, limited access toll roads, theme parks, zoos and educational facilities.
Traditional Burger King Restaurant Facility: A self-contained, full size Burger King Restaurant which is located and operated on a site as a freestanding building or within another building structure such as a shopping mall. A Traditional Burger King Restaurant does not share any common areas with any other businesses and serves the standard approved menu for Burger King Restaurants.
Non-Traditional Burger King Facility: A Burger King Restaurant may be located at a site which includes other businesses, such as retail, food service, gas stations, convenience stores, other franchised businesses or restaurants or other similar facilities.
Financial Assistance: If the franchisor owns or leases the land or the land and building of the restaurant, they will lease or sublease the location to the franchisee. In addition, the franchisor may from time to time provide financing for certain types of transactions. On an infrequent basis, Burger King Corporation offers financing for the purchase of an existing restaurant for operation as a franchise or the conversion of a non-Burger King restaurant business to a franchised Restaurant. The franchisor does not currently receive any payments from unaffiliated lenders because of placement of financing with them.
Training and Assistance: The Franchisee Operating Partner and a designated restaurant manager must successfully complete the franchisor's entire mandatory training program. They may have to complete up to 84 days of training, which includes in-restaurant training and classroom programs. Instructional materials vary by program and may include various materials in written, electronic, or other forms
Territory: The Franchise Agreement grants the right to operate the Burger King Restaurant at a specific location only. The Franchise Agreement does not grant or imply any type of area or territory, exclusive, protected or otherwise, or protected customer base.
Term of Agreement and Renewal: The length of the franchise term is 20 years for a freestanding restaurant, and may be less for non-traditional locations or where property control is for a shorter period. There is no right of renewal.
Obligations and Restrictions: One of the named franchisees must contractually agree to participate personally in the direct "on-premises" operation of the franchised business, live near the restaurant and must devote full time and best efforts to the day-to-day operation of the restaurants with no operational or management commitment in other businesses. The franchisee must sell only those goods and services that the franchisor authorizes to sell.
Total Number of Units: 12,150 units worldwide.
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Franchise Fee | $50,000 | $50,000 |
| Travel and Living Expenses while Training | $0 | $25,000 |
| Real Property/ Occupancy Charge | $400,000 | $800,000 |
| Civil & Architectural Drawings / Professional Fees | $6,000 | $30,000 |
| Zoning Expenses | $5,000 | $25,000 |
| Improvements / Construction | $550,000 | $850,000 |
| Landscaping | $15,000 | $30,000 |
| Equipment | $175,000 | $300,000 |
| Decor Package | $25,000 | $65,000 |
| Signage & Drive-Thru | $15,000 | $60,000 |
| Pre-Opening Wages | $52,000 | $56,000 |
| Opening Inventory | $6,000 | $8,000 |
| Cash and Inventory Control System | $35,000 | $50,000 |
| Insurance | $14,000 | $22,000 |
| Working Capital / Additional Funds | $50,000 | $95,000 |
| Business Licenses, Utility Deposits, Lease Deposits, and Payments | $10,000 | $20,000 |
| Total | $1,408,000 | $2,486,000 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 4.5% of monthly gross sales |
| Advertising | 4% of monthly gross sales |
| Rent (where property leased from franchisor) | Varies |
| Building Improvement Payments | $500 per month |
| Late charges/ interest/stamp tax | Lesser of 18% per annum or maximum rate allowed by Florida law |
| Transfer of Interests | $2,000 |
| Application Fee | $250 |
| New Franchisee Training Fee | $2,000 |
| Entity or LLC Fees | Up to $5,000 per Entity; plus up to $1,000 per restaurant transferred to Entity or LLC |
| Franchise Extension Fee | $2,500 annually |
| Investment Spending (marketing) | Collectively agreed upon amount |
| Sales Transfer Study | Minimum $5,000; Maximum $8,000; Average $6,400 - Per potentially affected restaurant |
| Sales Impact Contribution | Varies |
| Gift Card Services | Varies |
| Escrow Deposit | $5,000 |
| Miscellaneous Reimbursements, Purchases, Services | Varies |
Date of FDD: 2008
The above information has been taken from the UFOC/FDD of the Burger King.
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