Burger King Facelift--It’s Required!
Miami, Florida based burger franchisor Burger King, the second largest burger food chain in the United States, recently announced it plans to remodel and redesign its 12,000 restaurants worldwide. The 20/20 design—and no, that is not the popular ABC news program’s design—is a determination by Burger King to provide a look that is “contemporary, edgy, and futuristic.” The cost of the remodel and redesign isn’t cheap; franchisees will have to spend between $300,000 and $600,000 for each restaurant. Some of the new design aspects include rotating-red-flamed chandeliers, TV-screen menus, brick walls, and industrial-inspired corrugated metal. The good news for franchisees is that Burger King restaurants already remodeled with the 20/20 design have reported increases in sales between 12 to 15 percent, and some locations that have completely rebuilt their restaurant using the new designs have had sales increases as great as 30 percent.
Ninety percent of Burger King’s restaurants are franchisee owned, and by contract they are required to update their restaurant. Just like Burger King’s franchise agreements, most franchise agreements require franchisees to make upgrades at certain intervals. Thus, it is a contract term that becomes vitally important to franchisees and potential franchisees when they are entering into a franchise agreement. All kinds of issues must be considered on the franchisees part; for example, what are the costs of upgrades, are the upgrades optional or required, who will provide financing if the upgrade will be costly, and what if the franchisee cannot obtain financing? An attorney experienced in franchise law can help you sort through all of these concerns and ensure you, as a franchisee, know exactly what your obligations will be.
