"Clearly one of the most pressing issues facing the Burger King system today is the financial distress of a number of our franchisees," said Brad Blum, chief executive officer, Burger King Corporation. "Addressing this issue and turning it into an opportunity to recapitalize these franchisees and enable them to emerge stronger with more robust financial structures will set us up for success. This is a top priority to enable us to focus on quality and on delivering an outstanding experience to our customers."
To accelerate this process, the company has hired Trinity Capital, LLC, to work with BK franchisees, their creditors, and Burger King Corporation.
"To help our franchisees bring resolution to these issues -- which include short-term liquidity, the ability to meet franchisee obligations and the need to reinvest in their business -- we have hired Trinity Capital, whose expertise in these areas is widely recognized," Blum said. He added that Burger King Corporation is working in cooperation with BK's franchisee association, called the National Franchise Association, on the initiative.
Trinity will act as a neutral third party and negotiate the quickest possible resolution among the franchisees, lenders, and Burger King Corporation. Burger King Corporation is paying the professional and administrative fees for Trinity's services.
Blum stressed that the implementation of this program is an important first step in enabling the company's franchisees to meet their financial and capital spending obligations and focus on delivering operational excellence to the consumer.
"Franchisees must reinvest in their restaurants to keep them fresh and relevant for our customers," he said. "We must significantly improve the quality and the consistency of what we offer the consumer, as well as upgrade the appearance of our restaurants in order to be successful. The aim of this program is to help franchisees with financial restructuring so they can meet their obligations and become profitable again."
"We welcome this timely initiative to further strengthen our franchisee operations," said Julian Josephson, chairman of the National Franchise Association. "This is a significant step for the future of the Burger King brand, and a win-win opportunity for everyone involved."
Trinity Capital is a Los Angeles-based financial services firm that specializes in restructuring financially troubled franchise companies. Trinity Capital has helped restructure more than 3,000 restaurants and approximately $2.5 billion of franchise-related obligations for other companies.