Franchise News Release: Miami, FL - (Feb-3-2003)


Burger King Launches Franchisee Financial Restructuring Initiative


Burger King Corporation today announced the launch of the Burger King Franchisee Financial Restructuring Initiative to address the financial challenges of financially distressed franchisee operations. The initiative will assist a number of franchisees as they restructure their business so they can meet their financial obligations, focus on Restaurant operational excellence, reinvest in their business and return to profitability.

"Clearly one of the most pressing issues facing the BURGER KING® system today is the financial distress of a number of our franchisees," said Brad Blum, chief executive officer, Burger King Corporation. "Addressing this issue and turning it into an opportunity to recapitalize these franchisees and enable them to emerge stronger with more robust financial structures will set us up for success. This is a top priority to enable us to focus on quality and on delivering an outstanding experience to our customers."

To accelerate this process, the company has hired Trinity Capital, LLC to work with BURGER KING franchisees, their creditors and Burger King Corporation.

"Today I am pleased, truly pleased, to announce the launch of the Burger King Franchisee Financial Restructuring Initiative," said Mr. Blum. "To help our franchisees bring resolution to these issues -- which include short-term liquidity, the ability to meet franchisee obligations and the need to reinvest in their business -- we have hired Trinity Capital, whose expertise in these areas is widely recognized. Burger King Corporation is working in cooperation with the National Franchise Association on this initiative."

Trinity Capital has an excellent track record in assisting franchisees to restructure their companies. Trinity will act as a neutral third party and negotiate the quickest possible resolution among the franchisees, lenders and Burger King Corporation. As part of this arrangement and service to its franchisees, Burger King Corporation is paying the professional and administrative fees for Trinity's services.

Blum stressed that the implementation of this program is an important first step in enabling the company's franchisees to meet their financial and capital spending obligations and focus on delivering operational excellence to the consumer.

"Franchisees must reinvest in their restaurants to keep them fresh and relevant for our customers. We must significantly improve the quality and the consistency of what we offer the consumer, as well as upgrade the appearance of our restaurants in order to be successful. The aim of this program is to help franchisees with financial restructuring so they can meet their obligations and become profitable again," Blum said.

"We welcome this timely initiative to further strengthen our franchisee operations," said Julian Josephson, chairman of the National franchise Association. "This is a significant step for the future of the BURGER KING® brand, and a win-win opportunity for everyone involved. The leadership of the NFA applauds our new CEO, Brad Blum and the Sponsor Equity Group for their immediate attention and response to this important matter. Now, all of us in the Burger King system can focus our attention on satisfying our customers."

Trinity Capital is a Los Angeles based Financial Services firm that specializes in restructuring financially troubled franchise companies. Trinity Capital has helped restructure more than 3,000 restaurants and approximately $2.5 billion of franchise related obligations for other companies.

Burger King Corporation and its franchisees operate more than 11,450 restaurants in all 50 states and 58 countries and territories around the world, with 91% o BURGER KING® restaurants owned and operated by independent franchisees. Since the company's founding in Miami in 1954, the BURGER KING® brand has become recognized for the great taste of FLAME-BROILING, HAVE IT YOUR WAY® and the WHOPPER®. In fiscal year 2002, ending June 30, 2002, the BURGER KING® system had system-wide sales of $11.3 billion. Burger King Corporation is owned by the equity sponsor group comprised of Texas Pacific Group, Goldman Sachs Capital Partners and Bain Capital.




 

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