Burger King is thriving.
While fast food competitor McDonald’s grapples with declining sales, Burger King has been attracting more customers.
Morgan Stanley just upgraded Burger King’s shares to “overweight,” citing positive trends in the business. The company’s stock has risen 56% in the past year.
Here are a few reasons Burger King is doing so well.
1. Tim Hortons still has huge growth potential.
Burger King recently acquired Canadian coffee chain Tim Hortons. Morgan Stanley analysts believe that Tim Hortons will more than 600 international locations in the next 3 years. The chain is also expected to add locations in the U.S.
2. The new “start-up” culture.
“These days … Burger King is behaving more like a startup than a typical burger chain,” writes Devin Leonard at Bloomberg Businessweek.
The company’s 33-year-old CEO Daniel Schwartz has been credited with turning the company into a “cash machine.”
Schwartz has swiftly changed Burger King’s menu to be less complicated. He also made franchising easier for overseas restaurants, leading to a rapid international expansion.
3. Operations are more efficient than ever.
Schwartz helped reduce Burger King’s corporate headcount from 38,884 to 2,425 by refranchising restaurants, meaning those workers now report to franchise owners.
He also axed many executive perks, including lavish offices and a $US1 million annual party at a chateau in Italy, Leonard writes.
These cost-cutting measures have helped profits soar.
4. Exciting promotions to draw in customers.
Burger King announced today that it is going to sell 10 chicken nuggets for $US1.49.
The company also brought back Chicken Fries earlier this year in response to a viral social media campaign.
Rather than bogging down the menu with risky new items, Burger King is playing up what it does best — classic fast food.
This benefits everyone. Customers are getting what they want, and workers and restaurant owners aren’t bogged down by an overwhelming menu.