Burger King Holdings, Inc. (BKC)

CliftonParkGMan (< 20) Submitted: 12/4/2008 6:00:18 PM : Start Price: $19.77 BKC Score: +43.99

BKC has shown growth and driven profits for the holding company but it has come at a cost to their franchisees. Deep discounts (99 cent menu) and extended hours have been key drivers of sales growth and royalty payment income for BKC. The problem is that BKC franchisee costs have escalated especially food costs and the average franchisee has negative comp cash flow and they will not be able to continue down the path of discounting unless they can sell more profitable products. Since their target advertising audience is the Young Adult Male (YAM's) they are also very value driven consumers but in the process their pervo looking King has turned off Mom's who buy profitable high end items like Salads. For that reason If you have made a profit sell because it will not get back to the 52 week high of $30.95 for at least 4 years.