Burger King's first restaurant, originally called Insta Burger King, was opened on December 4, 1954 in a suburb of Miami, Florida by James McLamore and David Edgerton; both alumni of the Cornell University School of Hotel Administration. McLamore visited the original McDonald's hamburger stand belonging to Dick and Mac McDonald in San Bernardino, California; sensing potential in their innovative assembly line-based production system, he decided to create a version of his own. By 1959, BK had grown to five regional stores in and around the metropolitan Miami area. About this time,
McLamore and Edgerton decided to expand BK nationally by using a franchising system; a popular method for expansion due to its low capital cost for the parent company. They formed Burger King Corporation as the parent and began selling territorial franchise licenses to private owners across the US.[4]
Company headquarters in Miami, Florida
Restaurant in Redwood City, California
In 1967, after eight years of private operation, the Pillsbury Company acquired Burger King and its parent company Burger King Corporation. At the time of the purchase, BK had grown to 274 restaurants in the United States. Even though Pillsbury owned and operated the company, BK was still the object of a series of failed and successful acquisitions and divestitures. In 1973, Chart House, owner of 350 BK restaurants at the time and one of BK's largest franchise groups, attempted to purchase the chain from Pillsbury for $100 million (USD). When Chart House's bid failed, its owners, Billy and Jimmy Trotter, suggested that Pillsbury and Chart House spin off their respective
Burger King holdings and merge the two entities into a separate company, an offer Pillsbury also declined. After the failed attempts to acquire BK, the relationship with Chart House and the Trotters began to sour; in 1979 BK successfully sued Chart House for improperly acquiring locations in Boston and Houston.[4] In 1984, Pillsbury purchased Chart House's successor DiversiFoods for $390 million (USD) after a separate, independent $525 million DiversiFoods management-backed leveraged buy-out of the company failed.
BK, and former corporate siblings, Bennigan's, Steak and Ale, Godfather's Pizza (part of the DiversiFoods acquisition[7]), Quik Wok and Häagen-Dazs ice cream shops, remained under the Pillsbury corporate umbrella until Pillsbury divested its restaurant holdings in 1989 and sold Burger King to British alcoholic beverage manufacturer and distributor Grand Metropolitan PLC. In 1989, under the ownership of Grand Met,
Burger King acquired many locations of its major UK rival Wimpy when the parent company bought the Wimpy's brand from its previous owner United Biscuits and re-branded them as Burger King, giving it an even greater presence in that country. While other "Wimpy" locations are still in operation presently, they are now independent from BK and no longer have the presence they once did. In 1997, Grand Metropolitan merged with Guinness to form a company called Diageo. Diageo maintained ownership of BKC until 2001 when Diageo decided to focus solely on their beverage products and divest itself of the chain.
By the time of the sale, Burger King's revenues and market share had declined significantly, Burger King had fallen to a near tie for second place with rival Wendy's in the US market for hamburger chain restaurants.[8] For many years leading into the early 2000s Burger King and its various owners plus many of its larger franchises closed many under-performing stores. Several of its largest franchises entered bankruptcy due to the issues surrounding the performance of the brand
In 2002, a troika of private equity firms led by TPG Capital, L.P with associates Bain Capital and Goldman Sachs Capital Partners agreed to purchase BK from Diageo for $1.5 billion (USD), with the sale becoming complete in December of that year. The new owners, through several new CEOs, have moved to revitalize and reorganize the company, the first major move was to re-name the BK parent as Burger King Brands.
The investment group initially planned to take BK public within the two years of the acquisition, this was delayed until 2006. On February 1, 2006, CEO Greg Brenneman announced TPG's plans to turn Burger King into a publicly traded company by issuing an Initial Public Offering (IPO). On February 16, the company announced it had filed its registration for the IPO with the Securities and Exchange Commission. On May 18, 2006, Burger King began trading on the New York Stock Exchange under the ticker symbol BKC and generated $425 million in revenue, the largest IPO of a US-based restaurant chain on record.
International expansion
While BK began its foray in to locations outside of the continental United States in 1963 with a store in San Juan, Puerto Rico, it did not have a large international presence. This situation changed shortly after the acquisition when Pillsbury opened its first international restaurant in Canada in 1969. Other international locations followed soon after: Oceania in 1971 with Hungry Jack's and in 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 closed by the end of 2001. BK reentered the Japanese market in mid-2007.[15] BK's Central and South American operations began in Mexico in the late 1970s. While Burger King lags behind McDonald's in international locations by over 12,000 stores, it has managed to become the largest chain in several countries including Mexico and Spain.
To assist in its international expansion, Burger King has established several subsidiaries to develop strategic partnerships and alliances to expand into new territories; in Europe, Burger King's subsidiary Burger King Europe GmbH is responsible for the licensing and development of BK franchises in the that market, Africa and Western Asia. In Asia, the BK AsiaPac, PTE. Ltd. business unit handles franchising for East Asia, the Asian subcontinent and all Oceanic territories except Australia.
Over the ten year period starting in 2008, Burger King sees 80% of its market share to be driven by foreign expansion, particularly in the Asia-Pacific and Indian subcontinent regional markets. While the TPG-lead group has 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 plans to focus 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 countries such as Macau, by the end of 2012.[ Its expansion into the Indian market has the company at a competitive disadvantage with other QSR vendors such as KFC because the country's large Hindu majority's aversion to beef. BK hopes to use their recent non-beef products, such as their TenderCrisp and TenderGrill sandwiches, as well as other products to help them overcome this hurdle to expand in that country.
