July 31 Burger King Worldwide Inc
reported a higher-than-expected rise in quarterly profit, helped
by a sharp fall in costs as the world's second-biggest hamburger
chain finished selling most of its restaurants to franchisees.
Expenses dropped nearly 65 percent in the second quarter
compared to the same quarter last year, as the company paid less
for borrowing costs, packaging, food, wages and rent.
The fast-food chain known for its Whopper hamburgers sold
305 restaurants to franchisees in the quarter. Almost all of its
13,000 restaurants now are owned by independent owners.
Successful franchise business models provide a steady and
lower-risk stream of revenue to restaurant companies because
franchisees pay royalties based on overall sales.
Franchisees tend to be invested in the success of their
businesses. They also are on the hook for operating costs
ranging from worker pay and food to rent and supplies, such as
straws and paper wrappers.
McDonald's Corp and most other fast-food restaurants
franchise virtually all of their restaurants. Starbucks Corp
and Chipotle Mexican Grill Inc are among a
handful of chains that own and operate most of their
Burger King said second quarter net profit rose almost 31
percent to $62.9 million, or 18 cents per share, from $48.2
million in the second quarter of 2012.
Excluding items, the company reported earnings of 21 cents
per share, topping analysts' average forecast of 19 cents,
according to Thomson Reuters I/B/E/S.
Quarterly global sales at established restaurants rose 0.6
percent, helped mainly by sales in Europe, the Middle East,
Africa and Asia.
Analysts polled by Consensus Metrix had expected global
same-restaurant sales to fall 0.1 percent.
Same-restaurant sales fell 0.5 percent in the United States
and Canada, far less than the 1.1 percent drop analysts
expected, as Burger King battles stiff competition from
fast-food giant McDonald's Corp and from Wendy's Co.
Revenues fell by almost half to $278.3 million as the
company transitioned to a fully franchised model and demand from
frugal diners remained soft. Analysts had expected revenues of
$322.3 million. Excluding the impact of refranchising and
currency movements, revenue increased 1.2 percent
Shares in Burger King were down 17 cents, or 0.9 percent, to