Burger King is about to get a new look and menu. Well, sort of, since a lot of what the privately-held No. 2 burger chain plans to do looks a lot like what No. 1 burger chain McDonald’s Corp. (NYSE: MCD) has done.
The Miami Herald reports that Burger King’s makeover is the “brainchild” of its newest owners, 3G Capital, which took over in October. Apparently 3G Capital has decided that healthier food choices such as Asian Chicken Salad, fruit smoothies, yogurt parfaits, BLT wraps and oatmeal with dried fruit and maple sugar will go over well with customers. Who would have guessed? McDonald’s.
3G Capital says it’s also time to exile the creepy King mascot and replace the dated bland interior of it 7,200 restaurants with a more contemporary décor in red and black. Customers will be allowed to move tables for large groups or nest away in private booths for more intimate meetings. The restaurants’ exterior, meanwhile, will feature black towers and signage proclaiming that Burger King is the Home of the Whopper, one of the few menu items to remain.
The massive makeover is a clear attempt by the chain to bring customers – especially women, who often make decision about where the family will eat – back to the chain. Burger King lost $6.8 million during the quarter that ended March 31, largely because same store sales in North America declined 6% during the period and franchise owners are crying out for help.
Burger King hopes incentives that could cut franchise owners’ cost to open a new restaurant by 50% will entice at least 1,000 franchise owners to convert to the new restaurants within 18 months. Still, it may be a tough sell for struggling owners who may wonder if they can afford the renovations, even as McDonald’s undertakes a $1 billion renovation program to update its 14,000 restaurants in the style of Starbucks (NASDAQ: SBUX), including 800 by year’s end.
No one doubts that changes to Burger King’s image, and in some ways its menu, were long overdue. But becoming a McDonald’s look-a-like at a time when even McDonald’s is changing its look may be a tough sell for some franchise owners struggling to stay afloat. Convincing loyal McDonald’s customers to try the same food item they might like, when they can remain at McDonald’s for food they know they like in a more modern setting may be an even tougher sell.
As of this writing, Cynthia Wilson did not own a position in any of the stocks named here.
