Alec Sohmer, Leading Financing Expert, Responds to Success of Burger King’s Franchising Strategy

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Following an article published by Entrepreneur, financing expert Alec Sohmer issues a statement discussing Burger King’s success last quarter and the impact of its new franchising strategy.

Financing expert Alec Sohmer responds to an article published by Entrepreneur on October 29th, which details Burger King’s new franchising strategy and how well it has performed this year.

According to the Entrepreneur article titled “Burger King’s Franchising Efforts Pay Off Big in 3Q,” Burger King’s net income increased tenfold since last year. By refranchising over 500 company-owned restaurants, Burger King’s net income rose from $6.6 million to $68.2 million in just over a year. While Burger King’s revenues declined about 40 percent from this decision, the article says the long-term income growth was more significant.

The article says independent companies, or franchisees own 99 percent of Burger King restaurants. This was a way for the fast food giant to keep overhead costs down and, instead, collect franchising fees.

“We grew comparable sales across all three international regions and opened 133 net new restaurants globally,” says CEO Daniel Schwartz in the article.

Alec Sohmer, a financing specialist and founder of Plymouth Rock Capital, says Burger King’s third quarter success also comes from the introduction of a new product. “Burger King seems to be doing very well this year, but it’s not just because of its successful refranchising strategy,” he explains. “Sales have risen since the fast food company introduced new reduced-fat French fries called Satisfries. By combining new, health-conscious products with its refranchising campaign, Burger King will be headed for even more success. People like to try new things and a more healthy-conscious menu will be a big selling point enabling them to achieve their goals.”

Alec Sohmer, a strategic financing leader and co-founder of Plymouth Rock Capital, has 20 years of Board-level experience. He has served in many interim management positions for businesses requiring significant turnaround or restructuring. He is able to increase revenue streams by utilizing a variety of line management techniques. In his two decades of experience, he has dramatically increased revenues of businesses by identifying untapped markets.

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