QSR 50 | August 2012 | By Jordan Melnick

Long Live the King

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Steve Wiborg, president of Burger King North America, is heading the turnaround.
Steve Wiborg, president of Burger King North America, is heading the turnaround.
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“In our consumer research, we learned that people are very passionate about this brand, but [for some of them] it had been a while since they’d been back and Burger King was not talking to them,” Wiborg says. “That was the case with a lot of the females we talked to. The past advertising didn’t click.”

Still, if the new commercials do a better job of communicating with women by focusing on the chain’s new, healthier menu items, they don’t altogether forget about its core customers—young males who probably don’t mind seeing Colombian beauty Vergara seductively feed her coworker by hand.

The third pillar, improving operations at Burger King restaurants, is the most important part of the overall strategy, Wiborg says. One common complaint over the last several years has been inconsistency from one Burger King to another, an issue that can spell disaster for a quick-service chain. To address the problem, Wiborg says, Burger King had to “change how we did things as a franchisor.”

First off, that meant settling a long-standing legal dispute between Burger King and the National Franchise Association (NFA), which filed a lawsuit on behalf of Burger King franchisees after the chain priced its double cheeseburger at $1 on its Value Menu.

“[The franchisees and Burger King] were almost like two brands, and it was really important to me and this management team that we move together as one brand,” Wiborg says. The NFA ultimately dropped the lawsuit after Burger King promised franchisees more input on Value Menu pricing and the length of limited-time offers.

Another major change in the way Burger King “did things” as a franchisor came in personnel: Burger King added 110 franchisor-franchisee liaisons to its roster, going from 50 people in the field to 160. The new management team also went on a 58-city tour of Burger King locations across the country to introduce themselves and their new vision for the chain to franchisees. Furthermore, Burger King created three committees—a restaurant council, a marketing council, and a people council—that are made up of franchisees and Burger King corporate employees to facilitate cooperation between the two camps.

After years of being on rocky terms with its franchisees, the new approach is the result of hard-earned wisdom.

“It’s a lot easier to sell something to our system if you have the franchisees as part of the plan,” Wiborg says. “That’s something we believe in whole-heartedly in running this brand. In a 90-plus-percent franchise system, it’s about execution. We can have the best plans in the world … and if it’s not being executed well and our franchisees don’t believe in it and they’re not living it, it has no chance of winning.”

The last pillar of the four-part strategy is location renovations. Again, Burger King is following in the category leader’s footsteps (McDonald’s is in the middle of a billion-dollar makeover of the majority of its stores) but the adage “better late than never” nonetheless applies to Burger King.

So does “now or never,” says one analyst.

“It has less to do with following McDonald’s and trying to compete and more to do with, ‘If we don’t do it, we’re not going to be around in five years,’” says Darren Tristano, executive vice president at Chicago-based consulting firm Technomic, about Burger King’s overall strategy.

Perhaps with that in mind, Burger King is promising an improved restaurant experience with enhancements at every one of its more than 7,200 locations, including digital menuboards to replace the traditional slat-and-slide boards, new employee uniforms, and new packaging. As for the pace of the updates, Wiborg says more than 1,400 locations are already signed up for reimaging and that 40 percent of all stores will have undergone the limited renovation within three years.

Burger King only had 300 franchisees coming up for mandatory remodeling, so it offered royalty reductions and discounts on fees to encourage franchisees to renovate their stores early. The chain also created a $250 million lending facility to give those franchisees easy access to funding for the reimaging and to pay for the $31,000 worth of equipment needed to prepare the new menu items.

“It’s been a real partnership,” Wiborg says.

Having set its $750 million reinvestment into motion, Burger King now must carry out all four pillars of its new strategy to maintain its place in the increasingly competitive burger market, let alone to start climbing the ranks in the quick-service sector. Much of the onus, Wiborg says, is on the chain’s franchisees.

“Without them executing our plan, we don’t have a chance,” he says.

But after leading what amounted to a corporate soul search, Wiborg is confident in Burger King’s future, even if he understands that the path ahead will not be easy.

“We have some catch-up to play,” he says. “The industry changes and what consumers want from your brand [changes], and your brand has to change with the times. And Burger King didn’t, in my view, for a number of years.”

Eager to make up for that lost time, Wiborg is quick to make it clear that, despite all the exciting things happening at Burger King, some things will never change.

“How we communicate and our menu may be a little different from what it’s been over the last 10 years as business has changed,” Wiborg says, but “we’re the home of the Whopper.”

Somewhere in his retirement, the Burger King must be smiling.

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