Full Description

Burger King Holdings, Inc. (BKH) is a fast food hamburger restaurant (FFHR). As of June 30, 2009, the Company owned or franchised a total of 11,925 restaurants in 73 countries and United States territories, of which 1,429 restaurants were Company restaurants and 10,496 were owned by its franchisees. Of these restaurants, 7,233 or 61% were located in the United States and 4,692 or 39% were located in its international markets. BKH’s restaurants feature flame-broiled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks and other food items. The Company generates revenues from three sources: retail sales at Company restaurants; franchise revenues, consisting of royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid to it by its franchisees, and property income from restaurants that BKH leases or subleases to franchisees. The Company operates in three reportable segments: the United States and Canada; Europe, the Middle East, Africa and Asia Pacific (EMEA/APAC), and Latin America.

United States and Canada

The Company’s restaurants are limited-service restaurants of various designs and are generally located in high-traffic areas throughout the United States and Canada. As of June 30, 2009, 1,043 Company restaurants and 6,491 franchise restaurants were operating in the United States and Canada. BKH’s restaurants consist of several different building types with various seating capacities. The traditional Burger King restaurant is free-standing, ranging in size from approximately 1,900 to 4,300 square feet, with seating capacity of 40 to 120 guests, drive-thru facilities and adjacent parking areas. Some restaurants are located in airports, shopping malls, toll road rest areas and educational and sports facilities.

The Company and its franchisees have opened 251 new smaller design restaurants in the United States and Canada through June 30, 2009. It has also developed the Whopper Bar, a small-scale, trendy version of its restaurant where guests can customize its signature burger with the choice of up to 22 different toppings. Its Whopper Bar in the United States opened in March 2009, at Universal Citywalk Orlando in Orlando, Florida. As of June 30, 2009, BKH owned and operated 1,043 Company restaurants in the United States and Canada, representing 14% of total United States and Canada system-wide restaurants. It owns the properties for 357 of its Company restaurants and it leases the remaining 686 properties from third-party landlords. Its property operations consist of restaurants where it leases the land and often the building to the franchisee.

Europe, the Middle East and Africa/Asia Pacific (EMEA/APAC)

As of June 30, 2009, EMEA had 2,580 restaurants in 31 countries and territories, including 278 Company restaurants located in Germany, the United Kingdom, Spain, The Netherlands and Italy. As of June 30, 2009, APAC had 733 restaurants in 13 countries and territories, including China, Malaysia, Thailand, Australia, Philippines, Singapore, New Zealand, South Korea, Indonesia, and Japan. All of the restaurants in the region are franchised other than its 16 Company restaurants in China and one Company restaurant in Singapore.

Australia is the largest market in APAC, with 327 restaurants as of June 30, 2009, all of which are franchised and operated under Hungry Jack’s, a brand that BKH owns in Australia and New Zealand. Its EMEA headquarters are located in Zug, Switzerland and its APAC headquarters are located in Singapore. In addition, it operates restaurant support centers located in Madrid, London, Munich, Istanbul, Rotterdam and Gothenburg (for EMEA), Singapore and Shanghai (for APAC). The Company and its franchisees have opened 125 new restaurants with the smaller building designs in EMEA/APAC through June 30, 2009. In addition, during the fiscal year ended June 30, 2009 (fiscal 2009), it opened its Whopper Bar in EMEA in Munich, Germany.

As of June 30, 2009, 278 (or 11%) of the restaurants in EMEA were Company restaurants. As of June 30, 2009, there were 16 Company restaurants in APAC, all of which were located in China. In July 2009, BKH opened its Company restaurant in Singapore. As of June 30, 2009, 3,019 or 91% of its restaurants in EMEA/APAC were franchised. Some of its international markets, including Hungary, Portugal, South Korea and the Philippines, are operated by a single franchisee. Other markets, such as the United Kingdom, Germany and Spain, have multiple franchisees. Its property operations in EMEA primarily consist of franchise restaurant sites located in the United Kingdom, Germany and Spain, which it leases or subleases to franchisees.

Latin America

As of June 30, 2009, the Company had 1,078 restaurants in 27 countries and territories in Latin America. There were 92 Company restaurants in Latin America, all located in Mexico, and 986 franchise restaurants in the segment as of June 30, 2009. In fiscal 2009, it opened 28 new restaurants in Mexico, of which nine were Company restaurants and 19 were franchise restaurants.

The Company competes with McDonald’s Corporation, Wendy’s/Arby’s Group, Inc, Subway, Yum! Brands, Inc.’s Taco Bell, Pizza Hut and Kentucky Fried Chicken, Applebee’s and Chili’s Ruby Tuesday.