Burger King - International Operations

International Operations

While BK began its foray into locations outside of the continental United States in 1963 with a store in San Juan, Puerto Rico, it did not have an international presence until several years later. Shortly after the acquisition of the chain by Pillsbury, it opened its first Canadian restaurant in Windsor, Ontario in 1969. Other international locations followed soon after: Oceania in 1971 and Europe in 1975 with a restaurant in Madrid, Spain. Beginning in 1982, BK and its franchisees began operating stores in several East Asian countries, including Japan, Taiwan, Singapore and South Korea. Due to high competition, all of the Japanese locations were closed in 2001; however, BK reentered the Japanese market in June 2007. BK's Central and South American operations began in Mexico in the late 1970s, and by the early 1980s in Caracas, Venezuela, Santiago, Chile and Buenos Aires, Argentina. While Burger King lags behind McDonald's in international locations by over 12,000 stores, as of 2008 it had managed to become the largest chain in several countries including Mexico and Spain. The company divides its international operations into three segments; The Middle East, Europe and Africa division (EMEA), Asia-Pacific (APAC) and Latin America and the Caribbean (LAC). In each of these regions, Burger King has established several subsidiaries to develop strategic partnerships and alliances to expand into new territories. In its EMEA group, Burger King's Switzerland-based subsidiary Burger King Europe GmbH is responsible for the licensing and development of BK franchises in those regions. In APAC region, the Singapore-based BK AsiaPac, Pte. Ltd. business unit handles franchising for East Asia, the Asian subcontinent and all Oceanic territories. The LAC region includes Mexico, Central and South America and the Caribbean Islands and has no centralized operations group.

Australia is the only country in which Burger King does not operate under its own name. When the company set about establishing operations down under in 1971, it found that its business name was already trademarked by a takeaway food shop in Adelaide. As a result, Burger King provided the Australian franchisee, Jack Cowin, with a list of possible alternative names derived from pre-existing trademarks already registered by Burger King and its then corporate parent Pillsbury, that could be used to name the Australian restaurants. Cowin selected the "Hungry Jack" brand name, one of Pillsbury's US pancake mixture products, and slightly changed the name to a possessive form by adding an apostrophe "s" forming the new name Hungry Jack's. After the expiration of the trademark in the late 1990s, Burger King unsuccessfully tried to introduce the brand to the continent. After losing a lawsuit filed against it by Hungry Jack's ownership, the company ceded the territory to its franchisee. Hungry Jack's is now the only Burger King brand in Australia; Cowin's company Hungry Jack's PTY is the master franchise and thus is now responsible for oversight of the operations that country with Burger King only providing administrative and advertising support to ensure a common marketing scheme for the company and its products.

Over a 10-year period starting in 2008, Burger King predicted 80 percent of its market share would be driven by foreign expansion, particularly in the Asia-Pacific and Indian subcontinent regional markets. While the TPG-lead group continued BK's international expansion by announcing plans to open new franchise locations in Eastern Europe, Africa and the Middle East, and Brazil, the company plan is focusing on the three largest markets – India, China and Japan. The company plans to add over 250 stores in these Asian territories, as well as other places such as Macau, by the end of 2012. Its expansion into the Indian market has the company at a competitive disadvantage with other fast food restaurants such as KFC because of the aversion of the country's large Hindu majority to beef. BK hopes to use their non-beef products, such as their TenderCrisp and TenderGrill chicken sandwiches, as well as other products to help them overcome this hurdle to expand in that country. 3G has reported that it will continue with the plans to grow globally, even ramping up the planned expansion to help increase their return on investment. It is expected that 3G Brazilian-based management connections in the region may help Burger King expand in Brazil and Latin America, where it has been having problems finding acceptable franchisees.

At the end of its 2011 fiscal year, Burger King is the second largest chain of hamburger fast food restaurants in terms of global locations, behind industry bellwether McDonald's (32,400 locations); it is the fourth largest fast food restaurant chain overall after Yum! Brands (parent of KFC, Taco Bell and Pizza Hut totaling 37,000 locations), McDonald's, and Subway (32,000 locations).