Burger King plans aggressive expansion in Mexico

Dec. 13, 2012

Burger King Worldwide Inc. and Alsea S.A.B. de C.V. have signed a joint venture which will significantly expand the brand's presence in Mexico.

As part of the transaction, ALSEA and BKW will combine their restaurants in Mexico to form a joint venture through a merger of BKW's Mexican subsidiary into Operadora de Franquicias Alsea S.A. de C.V. (OFA). The new joint venture company will own 203 Burger King restaurants in Mexico and has committed to open several hundred more throughout the next several years.

ALSEA, an operator of quick-service restaurants, coffee shops and casual dining establishments in Latin America, has been operating Burger King restaurants for more than 10 years in Mexico. As part of the joint venture, OFA will acquire the following rights and obligations:

  • Acquisition of 97 Burger King restaurants, bringing ownership count to 203 BK restaurants;
  • Operating control of the Burger King brand throughout all of Mexico;
  • Exclusivity in Mexico for 20 years;
  • Collection of royalties from sub-franchisees;
  • An annual development plan that includes the opening of new corporate and sub-franchised Burger King restaurants throughout the next 20 years; and
  • In exchange for a cash payment to BKW, ALSEA will maintain a majority stake in the joint venture, while BKW will maintain the minority stake.

"We are thrilled to announce the expansion of our long-standing relationship with ALSEA and believe they are the right partner to drive significant growth for the Burger King brand in Mexico," said Jose Tomas, president, Latin America and Caribbean, BKW. "Over the past 20 years, the Burger King brand has become the largest fast-food hamburger restaurant company in Mexico and the preferred choice among consumers. With this new joint venture, we will significantly increase our presence in the country and introduce more consumers to our signature flame-grilled menu items."

There are currently 409 Burger Kings in Mexico operated by 10 different franchisees. The transaction is subject to regulatory approval in Mexico.

Read more about franchising and growth.

Topics: Franchising & Growth , International , Operations Management

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