Burger King Signs Deal to Invade France
|This undated image provided by Burger King, shows a Burger King menu in French. McDonald's Le Royal Cheese in France will soon be facing more competition with Burger King signing a deal to expand in the country. (AP Photo/Burger King)|
NEW YORK (AP) — McDonald's Le Royal Cheese in France will soon be facing more competition with Burger King signing a deal to expand in the country.
The Miami-based chain said Tuesday that it's partnering with restaurant operator Groupe Olivier Bertrand to build on its three French locations, which are in travel hubs such as airports. It didn't specify the financial terms or how many more restaurants it will open, but said the joint venture is expected to create 1,200 jobs in the first year.
Naxicap Partners, a French private equity firm, will have a minority stake in the joint venture.
Burger King re-entered the French market last year after exiting in 1997, said Jose Cil, Burger King's president of the region encompassing Europe, the Middle East and Africa. The company had had as many as 40 locations in France in the past.
Globally, Burger King Worldwide Inc. has more than 13,000 locations. The company has pointed to McDonald's 34,000 locations as evidence of how much room it has to grow. But it will be up against the marketing muscle of its much bigger rival in many regions. In France, for example, McDonald's has more than 1,200 locations.
In the latest quarter, McDonald's Corp. said sales for Europe rose 0.2 percent at established locations. The company doesn't break out its performance by country but said France had "solid results." Burger King reported a 2.4 percent increase in the same period for the region encompassing Europe, the Middle East and Africa.
The deal with restaurant operator Groupe Olivier Bertrand is just the latest push by Burger King to rake in more revenue by striking deals with franchise operators overseas. Since owner 3G Capital announced last year that it was taking Burger King public again, the chain has signed deals to open locations in Brazil, China, India, Russia and South Africa.
Franchisees often have flexibility to adapt to local tastes overseas. In Latin America, for instance, McDonald's often offers condiment bars where customers can top burgers, said Woods Staton, CEO of Arcos Dorados, which operates McDonald's in the region.
In France, the Quarter Pounder at McDonald's is called Le Royal Cheese. As for Burger King's three locations in the country, Cil said there aren't too many tailored options yet. And he said the company's flagship burger goes by the same name.
"A Whopper is a Whopper everywhere," Cil said.