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INTRODUCTION & HISTORY 1.1 In 1955, Kroc knew that the key to success was through rapid expansion; thus, thebest way to achieve this was through offering franchises. Today, over 70 percent of McDonald's Restaurants are franchises. In 1986, the first franchised McDonald's opened inthe United Kingdom. Now, there are over 1,150 restaurants, employing more than 49,000people, of which 34 percent are operated by franchisees. Moreover, there are over 30,000these Introduction: When the Dick and Mac McDonald opened their first restaurant in San Bernardino,California in 1948, they never could have imagined the extraordinary growth their companywould experience. From modest beginnings, they found a winning formula selling highquality products quickly and low-cost. It was not until 1955 when Ray Kroc, a salesman fromChicago, became involved in the business that McDonald's really began to flourish. Krocrealized the same successful McDonald's formula could be exploited throughout the UnitedStates and beyond with the use of franchising. A franchise is an agreement or license to sell acompany's products exclusively in a particular area, or to operate a business that carries thatcompany's name.restaurantsin more than 119 countries, serving over 47 million customers around theworld. In 2000 alone, McDonald's served over 16 billion customers. For perspective, thatnumber is equivalent to providing a lunch and dinner for every man, woman, and child in theworld! McDonald's global sales were over $40 billion, making it by far the largest foodservice company in the world.Now McDonalds Corporation USA is the ninth most valuable brand in the world. InOctober 1996, McDonalds opened its first Indian outlet in Vasant Vihar, an affluentresidential colony in Indias capital, New Delhi. As of November 2004, McDonalds hasopened a total of 58 restaurants, mostly in

the northern and western part of India. WhileMcDonalds opened 34 restaurants in five years (by 2001), 58 restaurants in eight years (by2004), it is now planning to add more than 90 new restaurants in the next coming years.Although the initial scenes of crowds lining up for days outside the McDonalds restaurantsin Delhi and Mumbai are no longer seen, Indian consumer response to McDonalds productsstill remains very strong.McDonald's India is a joint-venturecompany managed by Indians. McDonaldsIndia, a subsidiary of McDonalds USA, hasexpanded its presence in India via 2 jointventure companies Connaught Plazarestaurants and Hardcastle restaurants.McDonalds (India) has a 50 per cent equitystake each in both joint venture companies.Connaught Plaza restaurants managesoperations and expansions across NorthIndia (Delhi, Jaipur and Punjab) led by Vikram Bakshi and Hardcastle restaurants, whichis headed by Amit Jatia, manages operations and expansions across Western India (Mumbai,Pune, and Gujarat). The growth of McDonalds in India is not as rapid as in other countries. How didMcDonalds do it? How did a hamburger chain become so prominent in a cultural zonedominated by non-beef, non-pork, vegetarian, and regional foods such as chola bhatura,kababs, bhaji, idli, samosa, dosa, vada, sambar, bhelpuri, and rice? The answer to thisquestion lies in McDonalds carefully planned entry and expansion strategy in accordancewith Indias changing political, economic, and cultural landscape in the 1990s.Six years prior to the opening of the first McDonald's restaurant in India, McDonald'sand its international supplier partners worked together with local Indian Companies todevelop products that meet McDonald's rigorous quality standards. Part of this developmentinvolves the transfer of state-of-the-art food processing technology, which has enabled Indianbusinesses to grow by improving their ability to compete in todays international markets.McDonald's constructs its restaurants using local architects, contractors, labour and - wherepossible local materials. McDonald's hires local personnel for all positions within therestaurants and contributes a portion of its success to communities in the form of municipaltaxes and reinvestment.The above aspects of McDonalds do not get covered and highlighted by the newshungry press. But when the false news of using beef allow in the French fries hit the market,the press did not leave a chance to exaggerate it. Despite the fact that right form thebeginning; no beef ingredients have been used in any of the

products in India.The marketing agency of McDonalds, Mudra comes to its rescue in such times. Theadvertisements created by Mudra are a rage all over the nation, especially amongst thechildren. Who can forget the little kid who gets nervous in the school competition, butbecomes happy again when his father takes him to McDonalds?McDonalds India has tried not to leave any stone un-turned in its objective to satisfythe Indian customer. But in Amit Jatias words, Customers are generally not forgiving. According to the survey conducted, customers demand low prices, more seating space, morevariety, home delivery, and the list is endless.The fundamental secret to McDonalds success is the way it achieves uniformity andallegiance to an operating regimen with proper marketing strategy. McDonalds India has toadhere to many rules and regulations laid down by the parent company, and it still has tocater to the Indian customer and his needs. McDonalds India is a case study on how to mixconformity with creativity. 2. PHILOSOPHY & VISION Every company has a Vision or Mission Statement. A vision statement should beshort, clear, vivid, inspiring and concise without using jargon, complicated words orconcepts. It represents the corporation guiding principles. It subtly indicates the businessesthe firm will pursue and the customer needs it will seek to satisfy. The vision statement alsoallows the employees to clearly adhere to the standards set up by the business unit and work in as per the guidelines framed by the company. 2.1 McDonalds Vision Statement "McDonald's vision is to be the world's best quick service restaurant experience. Beingthe best means providing outstanding quality, service, cleanliness, and value, so that wemake every customer in every restaurant smile." The McDonald's philosophy of Quality, Service, Cleanliness and Value (QSC&V) isthe guiding force behind its service to the customers. McDonalds India serves only thehighest quality products. All McDonalds suppliers adhere to Indian Government regulationson food, health and hygiene while continuously maintaining their own recognized standards.All McDonalds products are prepared using the most current state-of-the-art cookingequipment to ensure quality and safety. At McDonalds, the customer always comes first.McDonalds India provides fast friendly service- the hallmark of McDonalds that sets itsrestaurants apart from others. McDonalds restaurants provide a clean,

comfortableenvironment especially suited for families. This is achieved through McDonalds stringentcleaning standards, carefully adhered to.McDonalds menu is priced at a value that the largest segment of the Indianconsumers can afford. McDonalds does not sacrifice quality for value rather McDonaldsleverages economies to minimize costs while maximizing value to customers. The maineffort of McDonaldss service is to make customer the whole sole beneficiary through itsstringent standards maintained all over the world

4 3. SWOT ANALYSIS 3.1 SWOT Analysis

Strengths
SWOT stands for strengths, weaknesses, opportunities, and threats. To meet the needsof the key market it is important to analyse the internal marketing strengths of theorganisation. Strengths and weaknesses must be identified, so that a marketing strategy whichis right for the business can be decided upon. Once the strengths and weaknesses aredetermined, they are combined with the opportunities and threats in the market place. This isknown as SWOT analysis. SWOT analysis is a tool for auditing an organization and itsenvironment. It is the first stage of planning and helps businesses to focus on key issues.Once key issues have been identified, they feed into marketing objectives. McDonalds has built up huge brand equity. It is the No. 1 fast-food company by sales,with more than 31,000 restaurants serving burgers and fries in almost 120 countries.Sales, 2007 (11, 4009 million), 5.6% sales growth. Good innovation and product development. It continually innovates to retaincustomers in the business.

The McDonalds brand offers consumers choice, reasonable value and great service Large amounts of investment have gone into supporting its franchise network, 75% of stores are franchises. Loyal staff and strong management team. Advertisements and promotion to market the McDonalds as a brand carves a strongimage on customers mind.

Weaknesses
Core product line out of line with the trend towards healthier lifestyles for adults andchildren. Product line heavily focused towards hot food and burgers. Locations of outlets are sometimes not to closer to storage centres resulting in loss of quality. Seasonal. Quality issues across the franchise network. Break-even sales can be generated after operating for certain number of years only.

Opportunities
Joint ventures with retailers (e.g. supermarkets). Consolidation of retailers likely, so better locations for franchisees. Respond to social changes - by innovation within healthier lifestyle foods. Its moveinto hot baguettes and healthier snacks (fruit) has supported its new positioning. Use of CRM, database marketing to more accurately market to its consumer targetgroups. It could identify likely customers (based on modelling and profiles of shoppers) and prevent brand switching.

5 Strengthen its value proposition and offering, to encourage customers who visit coffeeshops into McDonalds. Installing childrens play-parks and focus on educating consumers about health,fitness. Continued focus on corporate social responsibility, reducing the impact on theenvironment and community linkages. Expansion into emerging markets of cities present in India.

Focus on middle-class income group customers with low-priced quality goods willenhance the profit margin. Senior Citizens have been totally deprived of marketing strategy adopted byMcDonalds. The burgers and eatables are more Indianized so that senior citizens findit familiar but the introduction of more milky beverages would attract more seniorcitizens and kids.

Threats
Social changes - Government, consumer groups encouraging balanced meals, 5 a dayfruit and vegetables. Focus by consumers on nutrition and healthier lifestyles. Competitive pressures on the high street as new entrants offering value and greaterproduct ranges and healthier lifestyles products. E.g. subway, supermarkets, M&S. Recession or down turn in economy may affect the retailer sales, as householdbudgets tighten reducing spend and number of visitors. Pressure groups - environmental.

Since McDonalds is a symbol of American cultural imperialism, it continues to facecontinue opposition from religious fundamentalists, protectionists, animal rightsactivists, and anti-globalization protestors 4. MARKETING OBJECTIVES A Marketing plan must be created to meet clear objectives. Objectives guidemarketing actions and are used to measure how well a plan is working.These can be related to market share, sales, and goals, reaching the target audience andcreating awareness in the marketplace. The objectives communicate what marketers want toachieve.Long-term objectives are broken down into shorterterm measurable targets, whichMcDonald's uses as milestones along the way. Results can be analyzed regularly to seewhether objectives are being met. This type of feedback allows the company to change plans.It gives flexibility. Once marketing objectives are set the next stage is to define how they willbe achieved. The marketing strategy is the statement of how objectives will be delivered. Itexplains what marketing actions and resources will be used and how they will work together. McDonalds plans to open as many as 140 restaurants throughout India this year,focusing on drive-through outlets. Investment of more than Rs.400 crore in the next two years to expand its operations. Transform itself into a high-volume, mass-market brand with compounded annualgrowth at around 30 per cent to 35 per cent in the next few years. Addition of franchisees as current 75% income generated is from franchisee centersaffiliated to McDonalds.

Moving out of the metros and concentrate its efforts on other mid-sized cities inproviding service. The plan is to enter a new city, understand the market and thenmultiply by opening up more outlets in these cities rather than spreading to too manycities at a time Increase the number of customers turning up at its restaurants around the country byproviding the same service and quality by achieving 100% customer satisfaction. Target on customers between age-groups 24-38 with childrens to position itself as afamily restaurant and the ideal place for kids and teenagers. Increase brand loyalty among customers. To build a new generation who will staywith the brand and then emerge as a long-term player. Introduce new innovative menus by development of new products, which cater topeople's needs by keeping Indian tastes in mind and to provide greater choice whilstensuring that the products meet the requirements of a balanced diet, so that the crowds keep pouring through the doors. MARKETING OBJECTIVES A Marketing plan must be created to meet clear objectives. Objectives guidemarketing actions and are used to measure how well a plan is working.These can be related to market share, sales, and goals, reaching the target audience andcreating awareness in the marketplace. The objectives communicate what marketers want toachieve.Long-term objectives are broken down into shorter-term measurable targets, whichMcDonald's uses as milestones along the way. Results can be analyzed regularly to seewhether objectives are being met. This type of feedback allows the company to change plans.It gives flexibility. Once marketing objectives are set the next stage is to define how they willbe achieved. The marketing strategy is the statement of how objectives will be delivered. Itexplains what marketing actions and resources will be used and how they will work together.

McDonalds plans to open as many as 140 restaurants throughout India this year,focusing on drive-through outlets. Investment of more than Rs.400 crore in the next two years to expand its operations. Transform itself into a high-volume, mass-market brand with compounded annualgrowth at around 30 per cent to 35 per cent in the next few years. Addition of franchisees as current 75% income generated is from franchisee centersaffiliated to McDonalds. Moving out of the metros and concentrate its efforts on other mid-sized cities inproviding service. The plan is to enter a new city, understand the market and then multiply by opening up more outlets in these cities rather than spreading to too manycities at a time Increase the number of customers turning up at its restaurants around the country byproviding the same service and quality by achieving 100% customer satisfaction. Target on customers between age-groups 24-38 with childrens to position itself as afamily restaurant and the ideal place for kids and teenagers. Increase brand loyalty among customers. To build a new generation who will staywith the brand and then emerge as a long-term player. Introduce new innovative menus by development of new products, which cater topeople's needs by keeping Indian tastes in mind and to provide greater choice

whilstensuring that the products meet the requirements of a balanced diet, so that thecrowds keep pouring through the doors.

7 5. MARKETING STRATEGY 5.1 McDonalds Road Map for India 5.1.a Emphasis on Local Management: McDonalds has given the adage of think global, act local a concrete shape in India.The companys localization strategy is clearly manifest in the critical area of management.McDonalds decided to set up two joint ventures on a 50:50 basis with two localentrepreneurs in Mumbai and Delhi. In Mumbai, Amit Jatias company, HardcastleRestaurants Private Limited, was selected to own and manage McDonalds restaurants in thewestern region. In Delhi, Vikram Bakshis Connaught Plaza Restaurants Private Limited waschosen to own and manage McDonalds restaurants in the northern region. Both VikramBakshi and Amit Jatia are responsible for running McDonalds in India. Vikram Bakshi hasextensive background in real estate development in Delhi, while Amit Jatia, a vegetarian, hasa chemicals and textile business background in Mumbai. It was not their backgrounds,however, that won the confidence of the Big Macs management. Rather, it was theirbusiness plan emphasizing India-centric management strategies and their easy access tobureaucracy so critical to effective government relations building. 5.1.b Politically Correct Strategy: In the beginning, McDonalds was faced with two challenges of the Indian market:(1) How to avoid hurting religious sensibilities of Indian consumers; and(2) How to avoid political confrontation with Indian government and politicalactivists.McDonalds managers were well aware of the fact that political activists can createtrouble for foreign-based fast food chains. The two local managing directors (Bakshi andJatia) of McDonalds took a series of politically correct strategies to deal with the initialchallenges of the Indian market. Since Indias majority of Hindus (80% of Indias population)revere cows as sacred and 150 million of Indian Muslims do not eat pork, beef and pork havebeen a complete no-no from the start. Instead, McDonalds introduced a muttonbasedMaharaja Mac in India, as opposed to its flagship beef-based Big Mac elsewhere.14 otheritemssuch as the tantalizing McAloo Tikki Burger (breaded

potato and pea pattie)wereadded to the menu to lure Indias middle class. Approximately 75% of the menu available inMcDonalds in India is Indianized and specifically designed to woo Indian customers. 5.1.c Employment Opportunity India has come a long way from opposing the entry of MNCs to encouraging them toexpand their business operations in India. Today, every expansion move McDonalds makesis received well by government officials. An important reason for this shift in attitude is theability of the company to generate quality and long-term employment opportunities forIndians. McDonalds typically employs local people, and the average McDonalds restaurantin India employs more than 100 people in all kinds of positions- cashiers, cooks, managers,etc. Besides, every expansion also brings additional income and employment opportunities toIndias agricultural work force, which is very pleasing to government officials.

8 5.2 Shifted from world-wide positioning of drive-in convenience and speedy-service. Thisworld-class strategy is the latest element of overall plan to continue revitalizingMcDonald's for customers through compelling food choices, great service and restaurantoperations, motivating value and exciting new restaurant decors. FORMULATING THE MARKETING STRATEGY:5.2.1. Selecting the Target Market Segment: Each company identifies the parts of the market that it can serve best and mostprofitably, which is called the segment of the market it wants to serve. Marketsegmentation allows to divide a market into smaller groups of buyers with distinct needs,characteristics, or behaviours who might require separate product or marketing mixes.McDonalds identified certain segment based on its geographical and demographicsegments. o

Geographic Segmentation Geographic segmentation calls for dividing themarket into different geographical units such as nations, regions, states, countries,cities, or neighbourhoods. McDonalds India divided the country into differentzones based on directions and concentrated particularly on North and West zoneas its first market segment to attract on. o Demographic Segmentation Demographic segmentation divides the market intogroups based on variables such as age, gender, family size, family life cycle,income, occupation, education, religion, race, generation, and nationality.McDonalds targeted different age groups from children and teens to adults uptoage less than 30 years. Like its other worldwide locations, McDonalds targetedchildren as their main clientele in India.Children are an enormously powerfulmedium for relationship building in India. They not only influence markets interms of the parental decision-making to buy certain kinds of products, they arealso future consumers. Thus, McDonalds has done everything possible to attractchildren. McDonalds also attracted many jean-clad teenagers, who use the outletas a venue to meet their friends circle, still a tricky issue among Indian middle-class families. Income segmentation was done to attract consumers from highincome groups. Target: A target market consists of a set of buyers who share common needs orcharacteristics that the company decides to serve. McDonalds targeted young familieswho are able to eat out, but the main focus was on to attract small childrens so that thewhole young family follows after it. The possible target market decided on was only 10%of the Indias population. As said by Vikram Bakshi from North zone, We want to firstconcentrate on metros, then open branches in other cities. We want to setup outletonly in cities where we can ensure the quality of products. McDonalds followed concentrated marketing (or niche marketing), a marketcoverage strategy in which a firm goes after a large share of one or a few segments orniches. Different phases to move into target markets was scheduled on

Phase I Focus on cities of relatively high incomes where citizens are exposed towestern food and culture. High-income urban dwellers are seeking variety in their choiceof foods and are willing to spend more on international cuisine, including fast foods. o Phase II Move to smaller satellite towns (Gurgaon, Pune). Positive spill-over effectof reputation from main metros. Other cities like Jaipur, Agra were also targeted to attractforeign tourists who often visit them as favourite tourist destinations. o Phase III Move on to crowd pulling centers like malls, multiplexes, highways,railway stations and airports. o Phase IV Introduce new low-priced products with same quality and service formiddle class income groups of people. 5.2.2. Positioning the Offer Mc Donalds mein hai kuch baat, a place for entire family to enjoy. Mc Donaldspositioned for youth families.Positioning is about communicating the unique selling advantage or proposition to thetarget audience in everything the firm does i.e., marketing, sales, and customer service. Theconsistency helps our customer remember. Our marketplaces have lots of choices. Too many,perhaps, for the average consumer to evaluate logically. With hundreds of choices in anygiven locale, many people simply look for a referral to a product or with professionalservices: a company that their friends trust. Those who shop around consider two or threeoptions and take the best of the three.With hundreds of choices, and with products and services that most consumers findhard to differentiate, how do you set yourself, apart from the crowd? Positioning allows amarketer to think about why a customer would want to do business with them. What do youoffer that the other producers don't? What does a potential client get by doing business withyou, which will serve their needs well?Positioning has three components:

What are your strengths? Your distinctive competencies? What about your offeringsprovide value to your customers? Who is your target customer? What about makes them an ideal fit for the value youoffer? How are you different from your competitors in ways that your customers andpotential customers will value? In other words, what is your unique sellingproposition? Your competitive advantage?When all three are put together, we have a positioning statement. Positioningstatements are the bases for all marketing messaging, sales scripts, and at a corporate level:branding.So here are the things we need to know to be able to develop your own market positioning: Who are you? As a company? As a sales rep? What is your firm or known for? (Ask people what they think. It may not be whatyour internal talk says it is. Is it prompt claims? Or telling it like it is? Or it might justbe everyone knows you.) What do your customers appreciate about your products or services? (Ask yourcolleagues and your customers. Again, it might not be what you think. Maybe you areknown for high quality. Or perhaps for returning calls promptly or your problemsolving ability. Maybe it is just that you are convenient. ) What are you particularly strong at? (These are your core competencies.) What are you better at, than anyone else in your business? As a company? As aprofessional? As a sales rep? (Quality? Innovation? Cost effective choices?) Who are your most satisfied customers? What is it that they value most about whatyou have to offer?

Based upon your sales goals and annual plan, who is your target market? The key hereis the fit between what you do well and who or what type of business needs what youare good at. What value can you bring your customers that they will value the most, based uponyour unique strengths? At a company level, can you articulate this competitive value for your target, bestcustomers? Does your branding reflect this? Do your communications use thismessaging as its foundation? o Are your web, collateral, and sales force attuned to this value? o Do your services focus on this value? o Does your customer service reflect this value? o Does your customer service reflect the promise of the brand? Or are customerscontinually shocked that the customer service is not like the brand image atall?Your customers are bombarded with hundreds - perhaps thousands of commercialmessages each day. Believe it or not buying your product or service is probably not theirmost important priority. So, in the end, it comes down to relationships. Does your vendorunderstand your needs?Thus, positioning is EVERYTHING, because, positioning is that unique value youoffer, to that target market you seek, in ways that are better, more effective, more amazinglymeeting your needs than any of your competitors. And, the customer service, and employeerelationships need to MATCH or be INTEGRATED with the market positioning.

Importance of Positioning: Marketing strategythataimsto make abrandoccupy a distinct'position,' relative to thecompetingbrands,in the mind of thecustomer.Firms apply thisstrategyeither by emphasizing the distinguishingfeaturesof their brand (what it is, what it does and how, etc.)or try to create a suitableimage(inexpensive orpremium,utilitarian or luxurious, entry-level or high-end, etc.) throughadvertising.Once a brand is positioned, it is very difficult toreposition it without destroying its credibility.

Develops Brand Image.

Creates Demand.

Creates Value In The Mind Of Customer.

Commands Premium Price. 5.2.3. Assembling the Marketing Mix -

Assembling the marketing mix means assembling the four Ps of marketing viz.product, price, place, and promotion, in the best possible combination. The marketing mixshould be viewed as an integrated and coordinated package of benefits that reflect thecharacteristics of customers and various targeted publics and satisfy their needs, wants, andexpectations. Note that the elements of the marketing mix should beintegrated because each element of the mix usually has some impact, direct or indirect, on the other three. Forexample, if you improve the product or service you probably have to change the pricebecause it costs more to produce. Although you may not have to change where the product isdelivered to the customer, you will almost certainly have to change the promotion orcommunication with the customer because you need to tell the customer about the changesyou have made in the product and how the changes will make it more desirable and satisfying.

The marketing mix principles (also known as the 4 Ps.) are used by business as toolsto assist them in pursuing their objectives. The marketing mix principles are controllablevariables, which have to be carefully managed and must meet the needs of the defined targetgroup. The marketing mix is apart of the organizations planning process and consists of analyzing the defined:

How will you design, package and add value to the product?Product strategies.

What pricing strategy is appropriate to use?Price strategies.

Where will the firm locate?Place strategies.

How will the firm promote its product? Promotion strategies.

Marketing strategies must feature customer orientation, input, and accessibility in thefight to the top of the market. McDonald's is no different. An example of this is illustratedwith a comparison of McDonalds and Wendy's. At first glance, they may appear to haveroughly the same marketing mix and target markets. Both are fast food and provide similarproducts. However, looking closer, one can recognize that McDonald's primary target marketis children ages 3-11 and their parents. McDonald's understood that the parent was makingthe purchasing decision, most likely based on price.What McDonald's marketing executives did was ingenious. They put an Rs.20 toy inwith the hamburger, French fries, and drink and gave it a special name, the "Happy Meal".Then McDonald's marketed the Happy Meal to the kids. If you have you ever asked yourchild where to buy a Happy Meal, they will tell you that there is only one place you can buyone, and that is at McDonald's has Ronald McDonald, playgrounds or PlayPlaces, "HappyMeals," and fun advertisements with brightly colored "Fry Guys" or the "Cheese Burgerler".Contrastingly, Wendy's targets a more adult market and the restaurants represent a moremature atmosphere with carpet floors and Dave Thomas advertisements. Wendy's does havechildren's meals that offer a toy,

but overall the atmosphere attracts a different demographicgroup. McDonald's restaurants have a variety of strategies that apply to product, placement,promotion, and price that makes them one of the most successful, well-recognizedorganizations in the world. A>Product Strategies

product

Branding

quality

Features

McDonald's marketing strategies should be looked at historically in order to see thelarger picture of the firm's success. There have been so many strategies since the inception of the firm that it is difficult to account for them all, the two most memorable are thedevelopment of the "Golden Arches" and "Ronald McDonald". These two icons have givencustomers a mental image of what to look for when they want quality food for a low pricefast.The firm revolutionized the fast food industry and positioned itself as the marketleader with low-priced, quality food and provided an entertaining atmosphere for thechildren. These things were what that the market wanted at the time and the firm answered inspades.

The perceived secret of McDonald's success is the willingness to innovate, even whilestriving to achieve consistency in the operation of its many outlets. The vegetarian burgermenu consists of the McAloo Tikki Burger. It is a Product Strategies McDonald's marketing strategies should be looked at historically in order to see thelarger picture of the firm's success. There have been so many strategies since the inception of the firm that it is difficult to account for them all, the two most memorable are thedevelopment of the "Golden Arches" and "Ronald McDonald". These two icons have givencustomers a mental image of what to look for when they want quality food for a low pricefast.The firm revolutionized the fast food industry and positioned itself as the marketleader with low-priced, quality food and provided an entertaining atmosphere for thechildren. These things were what that the market wanted at the time and the firm answered inspades.vegetable burgerwith potato, peas, and spices, tomato, onion, and a vegetable-tomatomayonnaise.McVeggie is another Vegetarianburger on the menu. It looks similar to the above McAloo Tikki Burger, but is made frommixed vegetables, peas, and spices, lettuce and veg mayonnaise (referred to as Veg Sauce inIndia).Another new Menu Item added is the McSurprise burger. It contains a patty, onion,Italian mayonnaise.There is also a Pizza McPuff, consisting of a puff pastry stuffed withpeas, sliced cheese etc.McDonalds concentrated on studying the Indian culture, its value-systems and itsinfluence in food consumption decision making. It found that although a substantialproportion of the populations were non-vegetarians, they stuck to mostly fish, mutton andchicken. Muslim took beef but though pig meat to be dirty; Hindus preferred neither beef norpork; Christian took both beef and pork. McDonalds decided, for the first time in theirbusiness history, to drop ham and beef burger from their

menu. 2 years back, they evenexcluded mutton burgers from their offerings. McDonalds developed a menu especially forIndian with vegetarian selection to suite Indian taste. It introduced products like McTikkiAloo for the Punjabi taste buds. McDonalds has also re-engineered its operation to addressthe special requirements of a vegetarian menu. The cheese and cold sauces used in India is100 % vegetarian. McDonalds are committed for giving customers wholesome, healthy, anddelicious food. They ensure that the cooking area as well as cooking equipment forvegetarian products is visibly segregated from the non Vegetarian sections. Whats more-their crew members cooking vegetarian food items are identifiable by their green aprons.Franchisees agree to operate theirrestaurantsin the "McDonald's way" but thereremains room for innovation. Many ideas for new menu items come from franchiseesresponding to customer demand. To maintain consistency in the current menu while the firmtests new products to expand the product line, McDonald's relies on test marketing new menuitems in pilot locations. New products are rigorously market tested so that the franchisee willhave a reasonable idea of its potential before it is added to the menu. The introduction of newproducts, which have already been researched and tested, considerably reduces the risk forthe franchisee. The franchisees additionally benefit from the extensive national market research programs that assess consumer attitudes and perceptions. What products do they want to buy and at what price? How are they performing compared to their competitors? This approach allows the firm to identify which items are likely to prove popular with consumers while ensuring that the company can deliver new products with consistent quality internationally. McDonald's already has a history of doing this so it will not require major changes to its operations strategy-at least initially. If the product line-up gets too large, then the task of maintaining quality becomes exponentially harder. The trick is to consider how to eliminate some of the existing menu items when you introduce new ones, while making sure the staff is fully trained in how to execute these products successfully. Restaurant chains encounter many obstacles in maintaining their business, but the most common obstacle is the logistical planning in getting food and supplies. McDonald's established warehouses within a reasonable proximity to all of their restaurants to solve some of the logistical problems it had experienced. This, along with

owning the warehouses allows the restaurants to get all of the needs met in one shipment and not deal with multiple suppliers. Suppliers are a critical part of the value chain. McDonald's considers product quality to be the most important aspect and sets its standards among the highest in the food industry built. The firm's mutual effort with suppliers and franchisees to develop and improve....products and production techniques enables McDonald's to meet the high quality standards; thus sharing in the growth and success of the restaurant. This growth and continued success, and the elimination of too many intermediaries, has allowed McDonald's to pass that value along to the customer.

B] Pricing Strategies

Pricing is the only mix which generates a turnover for the organization. Theremaining 3ps are the variable cost for the organization. It costs to produce and design aproduct; it costs to distribute a product and costs to promote it. Price must support theseelements of the mix. Pricing is difficult and must reflect supply and demand relationship.

penetration

skimming
competition pricing strategies product line

bundle psychological

The customer's perception of value is an important determinant of the price charged.Customers draw their own mental picture of what a product is worth. A product is more thana physical item; it also has psychological connotations for the customer. The danger of usinglow price as a marketing tool is that the customer may feel that quality is being compromised.It is important when deciding on price to be fully aware of the brand and its integrity. Afurther consequence of price reduction is that competitors match prices resulting in no extrademand. This means the profit margin has been reduced without increasing sales. Strategies Pricing is the only mix which generates a turnover for the organization. Theremaining 3ps are the variable cost for the organization. It costs to produce and design aproduct; it costs to distribute a product and costs to promote it. Price must support theseelements of the mix. Pricing is difficult and must reflect supply and demand relationship.Worldwide, McDonalds has achieved success by tapping middle-class households.But in India, while McDonalds has been able to get a larger share of rich and upper-middleclass population, it has not been as successful at effectively tapping the middle-class andlower middle-class segments. Capturing the latter segment is critical as McDonalds startsentering into smaller cities. But this section has mainly stayed away because of a widelyprevailed perception that McDonalds is expensive. This is the reason why the company cutprices on its vegetable nuggets from Rs 29 to Rs 19 and the soft

service ice cream cone fromRs 15 to Rs 7 in 1997. In September 2001, McDonalds offered its enormously popular shudh shakahari(pure vegetarian) Veg Surprise (a veggie burger) for Rs 17. With this price,McDonalds was able to sell the veggie burger 40% more than what it expected within amonth between September and October of 2001. In March 2004, McDonalds launched aHappy Price menu under which it sells four of its burger products at Rs20 each. This has ledto a 25% increase in customers. Clearly, the McDonalds strategy has been to increase salesvolume of its products by making its products available at an affordable price.A very popular punch line of McDonalds - Aap ke zamane mein, baap ke zamane kadaam. The main reason of this price strategy was too attract the middle class & the lowerclass of people in India. After this not only the upper class prefers going there but all class of people go there. The company strives to differentiate itself from other fast food restaurants byoffering a variety of menu items that appeal to a variety of people from those who just wantgreat burgers, to those who just want a quick healthy meal.Value Pricing Happy meal Small burger ,French fries ,Coke + Toy Medium Meal Combo- Burger , French fries ,Coke-Veg Rs:75 ,Maharaja Mac MealRs: 95 Family Dines under Rs: 300 Prices lower than Pakistan, Sri Lanka, and 50% lower than U.S.The most important reason for McDonalds pricing flexibility is its well-establishedsupply chain arrangement, which ensures efficiency and speed in distribution. Besides, hugeincreases in volume sales and food processing technology have been helping the company tooffset its cost.

C] Promotion

Strategies

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional mix can consist of

advertising

public relation

salespromotion promotional mix personal selling

direct mail

internet/E Commerce

The promotions aspect of the marketing mix covers all types of marketingcommunications. The methods include advertising, sometimes known as 'above the line'activity. Advertising is conducted on TV, radio, cinema, online,

poster sites and in the press(newspapers, magazines).Key objectives of advertising are to make people aware of an item,feel positive about it and remember it. The more McDonald's knows about the people it isserving the more it is able to communicate messages which appeal to themMessages should gain customers' attention and keep their interest. The next stage is toget them to want what is offered. Showing the benefits which they will obtain by takingaction, is usually sufficient. The right messages must be targeted at the right audience, usingthe right media. The Media Magic You Deserve a break today, so get up and get away- To McDonaldsThe above break commercial was one of the initial commercial themes adopted byMcDonalds United State which became the best known commercial song on television and,in fact, the most identifiable advertising themes of all time. Strategies A successful product or service means nothing unless the benefit of such a service canbe communicated clearly to the target market. An organizations promotional mix can consistof:Needham was one of the first advertising agencies of McDonalds which made manyrevolutionary advertisements for the company. Needhams advertising formula became knowin McDonalds as Food, Folks, and Fun and it remains the backbone of all the chainsadvertising campaigns. McDonalds is now, one of the worlds mightiest consumermarketers. Its brand valuation is $25 billion, making the ninth most valuable brand in the world

Why Mudra in India? DDB Needham and Leo Burnett are the advertising agencies of McDonalds areworldwide. Hence, when they came to India, The subsidiary of both the companies pitchedfor the account and Mudra the Indian partner of DDB Needham got the account. Since thevery beginning Mudra has been the advertising agency of McDonalds India.The Mudra team meets up with McDonalds marketing team on a regular basis andthey have a debate and discussion on the new strategies to be adopted. McDonalds usesvarious Medias like television, hoardings and bus shelters. They are almost out of print ads.McDonalds also sponsor many Television Programmers like Kaun Banega

Crorepati,Children shows etc.Even the paper Mats on the trays at the McDonalds are designed as per the ongoingMarketing Strategy of McDonalds. For e.g.: During the French fries issues, all their Papermats had description of the burgers, how the vegetarian products are made etc, to regain theconfidence of the customers. The placing of the pamphlets, banners in and around the outletsis decided upon by the area sales manager and the operations manager, in coordination withthe restaurant manager. For e.g. : currently they have the Bugs Life Theme going on whereinthey give free Bugs Life toys with the happy meal. All the outlets are decorated with thepictures of the toys and even the paper mats have pictures of the toys on them. The hoardingsaround the outlets carry the same theme. The 80-20 Menu Boards Even the menu counters in the outlet are a marketing tool for the company. They haveto be designed such that they catch the attention of the customer and tempt him to order theproduct. So McDonalds have menu boards that are descriptive as well as visual. They call itthe 80-20 menu board eighty percent visual and twenty percent descriptive. Under the recentresearch conduct by McDonalds they found that the consumers would have a clearremembrance of the 80-20 Board. This board also of the product before it ispurchased.Reconnecting with customers through contemporary global marketing direction Imloving it. I am loving it refers an attitude we want your employees to embrace & reflect intheir services. McDonald's sees the use of these catch phrases and the use of the GoldenArches as a very successful way of differentiating therestaurantsfrom helps give a feel other fast foodcompetitors. McDonald's has taken price competition out of the picture because the customerfeels they have gotten quality, convenience, service, and value - and McDonald's still makesyou feel like you are getting a break in your hectic day. Creating catch phrases are only onekind of promotion, and McDonald's uses many kinds of promotions to keep therestaurantsatthe top of the industry.Their other lucky Promotion strategies were like:

Collaboration with coke, M TV, Hungama .com, Sony Music, etc.

Scratch cards on large jumbo meals.

Prices- caps, T-shirt, internet card, CDs, free tickets to Lucky Alis contest.

Purchase of 2 nd

meal in a month qualified for Opel Corsa/ NZ trip

D] Placement Strategies restaurantsare positioned so that you are never morethan a few minutes away by foot in the city or by car in the suburbs. In addition, McDonald'sis tuckingrestaurantsinto schools, stores, and more. Direct Distribution Indirect Distribution

Logistics play a critical role in McDonalds location strategy. As a part of its Quick Service Restaurant (QSR) business, McDonalds has initially decided to open

its outlets onlywithin a 500-km radius of its main distribution centers in Delhi and Mumbai. This is thereason why McDonalds has not opened a single outlet in metropolitan cities like Kolkata inthe eastern part of India, despite the citys huge urban and cosmopolitan character.Besides Delhi and Mumbai, other places where McDonalds has opened uprestaurants are satellite cities located near Delhi (such as Noida, Gurgaon, and Faridabad), orMumbai (such as Pune); places with tourist appeal (such as Jaipur, Mathura, and Shimla); andcities with an eating-out culture (such as Ahmedabad, Chandigarh, and Bangalore). TheMcDonalds outlet in Ahmedabad in the state of Gujarat is an interesting case. Ahmedabad islargely a vegetarian city. But, like other metropolitan Indian cities, Ahmedabad has asignificant number of eating-out customers. Given long lines of people at the counter, itseems that McDonalds well-balanced menus of vegetarian and nonvegetarian items hasprovided enough choice and space for customers of this city.McDonalds has partnered with the state-owned oil company, Bharat PetroleumCorporation Ltd. (BPCL); to set up restaurants at the latters petrol stations in and aroundDelhi to make it more convenient for automobile-driving consumers. BPCL is the leadingpetroleum retailer in India and has the largest number of petroleum stations in and aroundDelhi. It is important to note the shift in government attitude toward MNCs that led to asuccessful partnership between McDonalds and the largest state-owned company

Keeping an eye on the huge potential for eating out venues for lower middleclassIndians, McDonalds has partnered with a railway station and bus station in Delhi to open itsoutlets: Delhi Metro Rail Corporation, and the overcrowded Delhis Inter-State BusTerminus, where thousands of people pass through daily on their way to differentdestinations. More importantly, to tap the automobile-driving consumers, business travelers,and tourists, McDonalds has set up drive-through outlets in Delhi and along nationalhighways. Two drive-through outlets on the Delhi-Agra and Mumbai-Pune highways haveproven to be successful. The company has plans to open more drive-through outlets in Delhiand Mumbai and along national highways - such as the Delhi-Jaipur highway, DelhiAmbalahighway, and Delhi-Ludhiana highway. The move to set up these new restaurants has beendriven by new business prospects, logistics, and supply chain.In order to tap into the business of shopping mall and film-going

customers,McDonalds has set up outlets at shopping malls and new multiplexes in metros like Delhiand Mumbai. The success of its outlet at the Crossroads in Mumbai is evidence that astrategic location outside a mall can bring in customers in hordes. Given the premium pricingin the shopping mall, it is not surprising to see that many people are content with window-shopping at the Crossroads. But they do not mind spending a few rupees at McDonalds for aburger or spicy fries. More important, families with children are happy to spend at least 7rupees to buy an ice cream for their children. Thus, while most shop-owners at the mall arehardpressed to break even, the lines at the McDonalds counters seem unending. A similartrend is seen at the newly opened multiplex in Delhis Vikaspuri.

6. PHYSICAL DISTRIBUTION AND LOGISTICS

A company the size of McDonald's requires the value chain to be increasinglyimportant. Not only does McDonald's want to add value for the customers, but also the firmlooks for ways to improve the operations that makes McDonald's a more efficient business.McDonald's is constantly striving to add value to the firm for their customers, and in doingso, the firm has created efficiency in getting the products to the customers quickly and asfresh as possible. McDonald's is constantly looking for ways to improve and is successfulbecause of the continuous updates on equipment, improvement on serving time, and infinding more ways than one to satisfy customers.McDonald's value chain is unique because of the rare need to depend upon othercompanies for supplies. The firm owns nearly every portion of the value chain includingwarehouses, delivery trucks, and thereal estatewhere theirrestaurantsbuilt. Restaurant chains encounter many obstacles in maintaining their business, but the most commonobstacle is the logistical planning in getting food and supplies. McDonald's establishedwarehouses within a reasonable proximity to all of theirrestaurantsto solve some of thelogistical problems it had experienced. This, along with owning the warehouses allows therestaurantsto get all of the needs met in one shipment and not deal with multiple suppliers.This, of course, does not eliminate the need for suppliers, but it has eliminated the need tocoordinate paper products deliveries with meat deliveries.

6.1 Supply Chain Management Another critical strategy was to set up a well-established supply chain in India inorder to achieve three objectives:(1) To operation its globally practiced QSCV (quality, service, cleanliness, and value)principle;(2) To enjoy flexibility in pricing; and(3) To launch a new product when necessary.To achieve these three objectives, McDonalds often uses an outsourcing model in allits markets. In some cases, it also actively imports. But given Indias relatively higher importduties and foreign exchange fluctuations, McDonalds decided early on to source its rawmaterials from the local suppliers to the maximum extent possible. Currently, McDonaldsonly imports the process control equipment that allows it to dish out burgers and other orderswithin its super-fast time frames. The company, however, sources 95% of its raw materialsfrom 38 local suppliers.

Fresh lettuce comes from Delhi, Pune (Maharashtra), Nainital, and Ooty (UttarPradesh);

Cheese comes from Dynamix Dairies located in Baramati (Maharashtra);

Buns come from Cremica Industries in Phillur (Punjab) and Shah Bector and Sons inKhopoli (Maharashtra);

Pickles come from Global Green Company in Hyderabad (Andhra Pradesh);

Sauce comes from Bector Foods in Phillur (Punjab); and

Chicken patties, vegetable patties, pies, and pizza puffs come from Vista ProcessedFoods in Taloja (Maharashtra).The entire supply distribution is the responsibility of AFL Logistics Ltd., a joint venture(50:50) between Airfreight and Coughlin in the U.S., and Radhakrishna Foodland (P) Ltd. inThane, Maharashtra. AFL is responsible for temperature controlled movement of all productsfrom suppliers to distribution centers.Setting up a well-coordinated supply chain was not easy, given Indias poortransportation and storage infrastructure, as well as its lower-quality agricultural products.Thus, six years prior to the opening of its first restaurant in India, McDonalds and itsinternational suppliers worked together with local Indian companies to develop products thatmeet the rigorous quality standards McDonalds demands. An underlying principle in productdevelopment was to strictly adhere to the Indian governments regulation on food, health, andhygiene and to exceed the governments standards. To do so, McDonalds transferred itsstate-of-the-art food processing technology to India, enabling Indian businesses to grow byimproving their ability to compete in todays international markets.McDonalds has worked with local Indian suppliers to consistently improve thequality and increase greater yields of agricultural products. For instance, it helped farmers of Trikaya Agriculture Company to grow high-quality lettuce year round in Ooty, Pune, Delhi,and other regions. McDonalds shared with Trikaya advanced agricultural technology andexpertise like utilization of drip irrigation systems that reduce overall water consumption andagricultural management practices. For quality control, Trikayas post-harvest facilities nowinclude a large cold storage facility, a cold chain consisting of a precooling room to removefield heat and large refrigerated vans with humidity controls. To ensure standardization andhigher quality, Vista International, which supplies the pies, nuggets, and vegetable andchicken patties, built a new facility in 1996 with help from McDonalds. This new facility hasinsulated panels, temperature control, and chill rooms. Vista International has obtainedAmerican Institute of Bakers and Hazard Analysis Critical Control Points (HACCP)certification

for quality standards.In some cases, Indian companies like Dynamix Dairies had the technology but nomarket for their milk derivative products. By associating with McDonalds Dynamix Dairieshas seen a regularly grow ing expansion of its market. Now, it not only supplies products toMcDonalds restaurants in India, but also has an export order of approximately US$12million per year.Radhakrishna Foodland (P) Ltd., which is responsible for getting products fromvarious suppliers and delivering products to various McDonalds outlets, has earned anexcellent reputation in maintaining a tight delivery-on-time schedule. This is possiblebecause of the companys installation of enterprise resource planning (ERP) software, whichprovides data of what is selling where. This way, the company is able to anticipate demand ineach retail outlet and place orders with producers accordingly. With the help of McDonalds,the company has set up a trucking fleet to move supplies to restaurants at short notice. Eachof the companys delivery trucks has three degrees of refrigerationa freezer section formeats, a cold refrigerator section for vegetables, and a non-refrigerated section for paper

cups, napkins, and plastic cutlery. These ways, each truck delivers multiple items at one goand saves the company and restaurants a huge sum of transportation cost.Radhakrishna Foodland distribution center also maintains high-quality standards incleanliness, including personal hygiene for the drivers, packing, and checking temperatures of the food it transports to various restaurants. The company maintains detailed data logs totrack the movement of each batch of food items. In case of a complaint about a food item atany McDonalds restaurants, the data logs help the company to identify the batch from whichthe particular food item came. Then the company issues a warning or decides to discontinuethe batch from which the food item came. This ensures a high-quality standard of food itemsdelivered to each McDonalds outlet. Not surprisingly, the company has obtained AmericanInstitute of Bakers and HACCP certification for quality standards.Such meticulous planning in setting up a well-coordinated supply chain system haspaid rich dividends to the McDonalds operations in India. It has minimized costs, optimizedquality control, and ensured higher customer satisfaction, which is so very essential for thecompanys growth. More critically, the improved transportation and food processingtechnology seems to have served as an important catalyst for increasing Indias agriculturalproductivity while raising farmers incomes. This has scored very well on the political frontand won the governments goodwill

7. FUTURE ANALYSIS

McDonalds can use following promotional techniques which should beappropriate to be used for increasing the sales: 1. Increase its product line.2. To have more variety to choose from, to include more deserts and more items.3. To provide better and quick service.4. Lower the supply chain cost so that it helps in cost reducing.5. To expand their Happy Meal choices to attract and retain customers.6. To educate about healthy lifestyle.7. Introduction of cafeterias serving premium and specialty coffees and other beveragesand other products such as cakes, pastries etc in the existing McDonalds.8. Provide with better ambience.9. Focus on gifts for all generations i.e. youth, kids especially senior citizen which is acompletely new concept.10. Special promotions during festivals as Indians tend to spend more at such events.11. Increasing the space for provision of birthday party areas.12. Try to sponsor college festivals.13. Work for social welfare of thesociety. 8. CONCLUSION

McDonald's marketing mix is strategic because of the diverse approaches that areused. First, in identifying the "four P's" of marketing addressed earlier (product, price,promotion, and placement), research shows that McDonald's is very careful in makingdecisions that effect each area and/or how each area effects the other. McDonald's isconcerned about how the firm will fulfil the needs and wants of its customers and in theactivities associated with maintaining therelationshipswith its stakeholders. McDonald'sstakeholders include customers, franchisees, suppliers, employees, and the local communitiessurrounding them.McDonald's has shown care for customers through the decisions to add more healthfulfoods to the menus, by changing how products are packaged or how foods are prepared, andby philanthropic contributions and sponsorships. Local adaptation, no doubt, has contributedto McDonalds business growth in India . The restaurant has developed competitiveadvantages in the industry of serving quality fast food at a low cost. In addition to thesedecisions, the development of the Golden Arches or Ronald McDonald has providedconsumers with memorable icons that are associated with quality, service, and value, just likethe McDonald brothers and Ray Kroc intended.McDonald's faces some difficult challenges in moving away from the fast food kingto a more health conscious provider for customers who care about what they eat. The keys toits future success will be maintaining its core strengths-an unwavering focus on quality andconsistencywhile carefully experimenting with new options. The company's environmentalefforts, while important, should not overshadow its marketing initiatives. Though there aremany opportunities for this fast food giant, McDonald's must keep the strategic nature of itsmarketing efforts to stay on top and provide what customers want.

history of Burger

Food History The widest-reported "first" appearance of the hamburger most commonly cited in the lore of foodservice was that the product appeared at the World's Fair in St. Louis in 1904. But the man who gave the hamburger its contemporary look and sought to expand the products appeal through chain operations was J. Walter Anderson, a Wichita, Kan., resident who went on to co-found the White Castle Hamburger system, the oldest continuously running burger chain. However, there is a history that in late eighteenth century, the largest port in Europe was in Germany. Sailors who visited port brought special food called Hamburg steak as a popular usage. It was a hard slab of salted minced beef, often slightly smoked, mixed with onions and breadcrumbs. Immigrants arriving England at that time also bring new food with consist of chopped beef, suet, and spices. The other famous story is that Charlie Nagreen of Wisconsin, at age 15, sold hamburgers from his oxdrawn food stand at the Outagamie County Fair. He went to the Outagamie County Fair and set up a stand selling meatballs. Business wasn't good and he quickly realized that it was because meatballs were too difficult to eat while strolling around the fair. In a flash of innovation, he flattened the meatballs, placed them between two slices of bread and called his new creation a hamburger. He was known to many as "Hamburger Charlie." He returned to sell hamburgers at the fair every year until his death in 1951. Food History

Burger, or hamburger, is the name given to a grilled beef patty that is served in a bun, along with condiments like ketchup, mustard, mayonnaise, lettuce, tomato, onion, cheese, etc. A burger is usually accompanied with lots of French fries. With time, other ingredients, like potato, vegetables, fish and chicken, have started replacing the beef in the patty. Burger is a very popular fast-food of almost all the kids as well as college-goers. However, very few have every thought about the history and origin of the delicious patty. To get some interesting information on background of burger, read on. PLAN OUTOLINE

1.0 2.0 3.0 4.0 5.0 6.0 7.0

EXECUTIVE SUMMARY COMPANY SUMMARY SERVICES MARKET ANALYSIS SUMMARY STRATEGY AND IMPLEMENTATION SUMMARY MANAGEMENT SUMMARY FINANCIAL PLAN

APPENDIX

Sandwich Restaurant Business Plan

Executive Summary
Burger Pal is a new restaurant that serves fresh and healthy BURGER sandwiches. Strategically located in Malate Manila, Burger Pal will quickly become the premier lunch destination downtown, serving locals and students. Burger Pal will attract 35% new customers a year after the second year and will reach profitability by the end of year two. Keys to Success Burger Pal has identified three keys that will be instrumental in its success. The first is the design and implementation of strict financial controls, which will be important, since the restaurant industry is quite competitive. The second requirement is that it offers high-quality fresh and healthy food to clearly stand out from the competition. The last key is the need to ensure proper visibility. Pita Pal must have a effective, targeted marketing campaign to support the opening of the store in order to ensure enough business. Food Burger Pal will offer the community an exciting menu of Burger sandwiches, salads, deserts and coffee beverages. Pita bread, Middle Eastern flat bread, is used as a healthy, tasty foundation for a variety of sandwiches. The customers will have the choice of Middle Eastern filling such as Hummus and Tabouli or more traditional American filling. Management Pita Pal will be lead by Steve Jones, a veteran of the restaurant industry. Steve worked for his parents at the family's restaurant for several years before moving on to work in one of Washington's finest restaurants while in college, as well as participating in Washington and Jefferson's Entrepreneurship Program. Through a combination of extensive business experience, valuable academic course work, and the award of a starter loan from the school's Entrepreneurship Program, Steve will develop a

profitable niche lunch restaurant. Sales for year two and three are $145,299 and $203,676 respectively. Profitability will be reached by the end of year two.
1.1 Mission

It is Pita Pal's mission to offer the finest, healthiest and best tasting pita sandwiches in Washington, PA. Pita Pal will offer the finest customer service, no customer will leave who is dissatisfied.
1.2 Keys to Success

Employ strict financial controls. This is extremely important in a retail food establishment. Offer the highest-quality lunch time fare. Ensure sufficient visibility. A strong marketing campaign required.

1.3 Objectives

To become the premier sandwich shop in downtown Washington, PA. To continually draw students off campus for lunch at a rate of 35% new customers per year after the second year. To become profitable within the first two years.

Company Summary

Pita Pal is a recently formed PA based L.L.C. formed by Steve Jones. The company is wholly owned by Steve. The business will be based in downtown Washington and will serve the lunch and early evening crowd.
2.1 Start-up Summary

As a start-up organization, Pita Pal will require a decent amount of equipment to begin operations. The following is a somewhat complete list of the needed equipment:

Cash register; Computer system, including printer, CD-RW, Internet connection; Convection oven; Refrigeration unit; Blender/food processor; Assorted knives, cutting boards, serving dishes, silverware, food containers; Shelving units; Tables, chairs, table clothes and other table accessories; Lighting units; Espresso machine and coffee maker (these items are subsidized by the coffee vendor who sells the coffee/espresso beans).

Start-up Funding Start-up Expenses to Fund $5,500

Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills)

$59,500 $65,000

$25,000 $34,500 $0 $34,500 $59,500

$0 $0 $0

Other Current Liabilities (interest-free) $0 Total Liabilities Capital Planned Investment Entrepreneurship Program Loan Investor 2 Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding $40,000 $25,000 $0 $65,000 ($5,500) $59,500 $59,500 $65,000 $0

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Start-up Requirements Start-up Expenses Legal Stationery etc. Brochures Consultants Rent $3,000 $300 $500 $1,000 $700

Total Start-up Expenses $5,500 Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets Total Requirements $34,500 $0 $25,000 $59,500 $65,000

2.2 Company Ownership

Pita Pal has been formed as a limited liability company in Pennsylvania. The L.L.C. business formation has been chosen as a way of protecting the owner from personal liability while avoiding double taxation associated with a traditional corporation.

Services
Pita Pal is a downtown based sandwich shop serving the lunch time hour as well as early evening, weekdays from 10-6 pm. Pita bread is chosen for several reasons: it is unusual, healthy, and quite versatile. Each customer will have their choice of different fillings for the pita sandwiches. The range of options for fillings (not an exhaustive list) are: tofu pate, falafel, hummus, baba ganouj, tabouli, turkey, ham, chicken, pesto, assorted vegetables and assorted cheeses. In addition to the pitas, there will be several different salads available, both green as well as pastas, assorted deserts, espresso and coffee.

Market Analysis Summary


Pita Pal will be serving the Washington, PA lunch time and early evening crowd. Two distinct market segments will be targeted: students of Washington and Jefferson College and "towners." The students will be attracted to Pita Pal as a better alternative to their on-campus meal plan. The towners will appreciate the selection and change from the more traditional offerings currently available on Main Street. Main Street has been chosen in Washington because of the recent renaissance of the downtown area. Currently, there are lots of different businesses that have hungry lunch time workers. The competitive environment that Pita Pal faces is not too stiff. Most of the lunch time fare in downtown can be categorized as traditional offerings, diner food. While this might appeal to older residents of the town, this does not appeal to many college students and to a growing population of people who are in search of more healthy food, Pita Pal should be a big hit.
4.1 Market Segmentation

Pita Pal has segmented the market into two distinct segments: Students This group is primarily from Washington and Jefferson College, a liberal arts school, a tenth of a mile from downtown. The students are looking for food vendors for two main reasons, the first is the desire to get off campus, the second is to have an alternative to the on-campus food service. Demographic data and behavioral traits for the students is as follows:

75% of the students are on some sort of financial aid; 67% have a part-time job; Ages 17-22; 42% of the students were in the top 15% of their high school class; 36% of the students were in the 85th percentile for the SAT; 89% of the students eat out at least twice per week; 75% of the students are on the school food program.

This information pertains to the Washington and Jefferson students. There will be a few community college students who will trickle in, but since their campus is six miles away, there will not be a significant number of community college students. Towners This group is the people that live and work in Washington, primarily in the downtown area.

Ages 24-55; The average individual income is $38,000; 55% of the people have at least some undergraduate schooling; 44% of the people work within a seven minute walk from the downtown area; 76% of the group go out for lunch one to two times a week.

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Market Analysis Year 1 Potential Customers Growth Students 8% 2,285 2,468 2,665 2,878 3,108 Year 2 Year 3 Year 4 Year 5 CAGR 7.99%

Towners Total

8% 8.00%

45,989 48,274

49,668 52,136

53,641 56,306

57,932 60,810

62,567 65,675

8.00% 8.00%

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4.2 Target Market Segment Strategy

The two different market segments that Pita Pal will be going after are distinct enough that there will be two different marketing campaigns, one for each group. This is necessary because the two groups respond to different forms of communication. Students spend the majority of their day on campus, but typically venture off campus during the day for lunch. The marketing effort to reach the students will be based on their forms of written media, The General, student newspaper. The towners can be reached through different sources of communication. These are people who work downtown and tend to patronize the other downtown businesses. These people are more in tune with the different business organizations that exist downtown. Pita Pal will attempt to communicate with this group via the local newspaper.
4.3 Service Business Analysis

Pita Pal exists within the general restaurant industry. There are many different categories within the restaurant industry. Pita Pal fits within two different niches within the industry, fast food and fast casual. Their offerings are similar to fast food in that orders are placed at the counter and served within a few minutes, and the menu is somewhat limited in selection. It is also similar to fast casual where the clientele tends to spend more time at a table relative to a fast food restaurant. The food is more expensive than a normal fast food restaurant and there is a larger product offering. For the restaurant industry, it is normal for a venture to reach profitability by year two. If they reach it any earlier it is likely that they are cutting corners and that profit is unlikely to be sustainable. If it takes more than two years than it is quite questionable whether they will ever reach profitability.
4.3.1 Competition and Buying Patterns

Pita Pal's competition exists in many forms:

Fast food: This takes the form of the traditional restaurants such as McDonald's, Burger King, and Wendy's, as well as healthier alternatives such as Subway.

Pizza: The predominant pizza place for sit down food is Brothers pizza, owned by two brothers who are professors at the college. This place is more popular with locals than with college students based primarily on the fact that the professor owners are not very well liked as professors so many students avoid the place. Deli: There are two different delis located downtown that serve deli style sandwiches. These delis serve very basic, standard deli fare, generally sliced deli meats. Diners: Based on the aging demographic of Washington, a function of its steel industry roots, there are several diners located in Washington, one of them downtown. These are very traditional diners, the menus are right out of the 1950's. On-campus food service: At least for the students, this is an alternative in terms of food offerings. Most of the students have a food plan. Because of the poor food offerings and the need for variety, many of the students are looking for other alternatives regardless of the fact that their food is already paid for via the plan.

Strategy and Implementation Summary


Pita Pal's business strategy will be to emphasize its healthy, custom food alternatives. Most of the competitors cannot compete with Pita Pal's healthy menu. Most places uses a lot of fried foods, compromising the nutritional value of their food. Additionally, no one offers the same flexibility or ability to customize the product offerings. This competitive edge will also be stressed in the marketing campaign. As mentioned earlier, Pita Pal's marketing strategy will be distinct for each of the two market segments that it is seeking to attract. The sales effort will be based on obtaining 100% satisfaction. Pita Pal will work hard to ensure that every customer has a wonderful experience at Pita Pal. Almost anything will be done to ensure any problems that arise are corrected.
5.1 Competitive Edge

Pita Pal has two competitive edges that will help it succeed in its business. The first edge is its healthy menu. Pita Pal takes pride in the fact that the only thing fried on the menu is falafel. Everything else is oil free, or at least free of any oils other than olive oil. In addition to the absence of oil based fats, much of its offered ingredients are vegetables, ensuring a healthy meal. The other competitive edge that Pita Pal will leverage is customization. Customers are offered a laundry list of ingredients that they get to choose from. It is Pita Pal's goal to serve the customer in whatever capacity is needed. This takes the form of its competitive edge where it will build the patrons pita pocket any way that they want.

5.2 Marketing Strategy

Pita Pal will employ a two pronged marketing strategy in an attempt to reach potential customers within the two market segments. To reach the students, Pita Pal must use resources that are successful in reaching the students. Recognizing that the students spend the majority of their time on campus, Pita Pal will rely on print advertisements and coupons within the student publications. The print advertisements will serve to draw notice to Pita Pal, increasing the student's awareness about this new restaurant alternative. Pita Pal will emphasize its menu as a tasty, healthy alternative to the campus meal plan as well as other local food vendors. Pita Pal will also use coupons as a way drawing in students. Coupons are quite effective for students, most of them are on a fixed budget and jump at the chance to save money by using a coupon. Print advertising will be used for the towners, however, Pita Pal will choose a different media source to reach these people. The readership levels for the local paper, The Sentinel are 67% of the targeted population. This will prove to be an effective method for reaching this group. Since the majority of this market segment work downtown, flyers will be passed around the downtown area calling attention to Pita Pal's opening. Coupons will be used, but to a lesser degree with this segment as they tend to have much lower response rates relative to the other market segment.
5.3 Sales Strategy

As previously mentioned, Pita Pal will emphasize its 100% customer satisfaction to win over customers. The fact that it advertises 100% satisfaction is far less significant relative to its actions that ensure total satisfaction. This effort is based on the philosophy that it is far cheaper to maintain a current customer than it is to attract a new customer. Additionally, it is far easier and cheaper to remedy any problems with a customer as it occurs instead of dealing with an unhappy customer. With this in mind, the organization has the firm belief that if all customers leave the store happy, there will be a significant increase in sales in the long term, directly correlated with the fact that customers are being properly taken care of. This sales philosophy is a way of treating customers. While the service offered customers is quite important, there is a need to have a quality product, otherwise the service aspect is in vain in the long term because the customers are treated well but do not perceive value in the food that they are buying. That being said, Pita Pal must offer fresh, healthy, quality food in order to fully support its customer-centered service. The menu has been devised in order to offer a wide selection with menu items that are easy to prepare, remain fresh, and are cost effective to serve. Having both a quality product and excellent service will ensure realization of the sales forecast.
5.3.1 Sales Forecast

Pita Pal has decided to take a conservative viewpoint toward its sales forecast in order to increase the likelihood of achieving the stated goals. Pita Pal has reason to believe that the first three months of business will be fairly slow. It is forecasted that business will steadily increase over the first two years. Profitability is forecasted to be achieved toward the end of year two.

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Sales Forecast Year 1 Sales Food Beverages Total Sales Direct Cost of Sales Food Beverages $48,361 $20,312 $68,673 Year 1 $14,508 $4,062 $102,323 $143,434 $42,976 $60,242 Year 2 Year 3

$145,299 $203,676 Year 2 $30,697 $8,595 $39,292 Year 3 $43,030 $12,048 $55,079

Subtotal Direct Cost of Sales $18,571

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5.4 Milestones

Pita Pal has identified four milestones that are clear in terms of the goals, and are achievable:
1. Business plan completion. The final version will be accomplished with in the first two months. 2. $50,000 in revenue. A date of expectancy has been established and it will be useful to gauge performance on whether the revenue is realized on schedule. 3. Profitability. Very important, it is forecasted to occur within two years. 4. Payback of entrepreneurship loan. While non-payment of the loan will not result in serious consequences it is a matter of pride to be able to take a loan from the College's Entrepreneurship Program and turn it into a successful business.

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Milestones Milestone Business plan completion $50K in revenue Profitability Payback of loan Totals Start Date End Date Budget Manager Department

1/1/2003

3/1/2003

$0

Steve Operations

3/1/2003 3/1/2003 3/1/2003

11/1/2003 10/15/2003 1/1/2007

$0 $0 $0

Steve

Sales

Steve Accounting Steve Accounting

Management Summary
Steve Jones is the driving force behind Pita Pal. Steve has lived in Washington, PA for the last four years while studying for his Bachelor of Arts from Washington and Jefferson College.

Steve's introduction to the restaurant industry came at the early age of 14 when he worked in his family's restaurant in Cleveland. While pursuing his degree Steve was a server at a fine dining restaurant called Angelo's, where he received more insight into the restaurant industry. He enrolled in the Entrepreneurship Program which combined coursework with speakers and empirical experience. For lucky few, it also provided them with a low interest loan which if the business fails does not personally obligate the borrower to repay. While Steve became more and more active in this program, he began to realize that he would not be truly happy unless he was operating his own business. He also realized that he would be most effective if he worked within the restaurant industry due to all of his experience as well as the wealth of contacts that he had access to because of his parent's business. With this in mind, at the end of the last semester of his last year, Steve applied for the a loan through the Entrepreneurship Program and was pleasantly surprised that he won. Steve has written a business plan in response to the application requirements for the loans, however by the time the loan was awarded, many months had passed and Steve felt the need to rewrite the plan before beginning the business. He undertook this task and the business has begun.
6.1 Personnel Plan

Steve will be the main employee of Pita Pal. For the first two months of operation, Steve will be the sole employee. During this period he will oversee the finishing touches on the retail space, will develop the product recipes, and will establish vendor relationships. Month three will mark the first month of sales. Steve will have at least two employees present during open hours. Steve will also have one employee working 1.5 hours before opening to help with food prep and both employees for .5-1 hour after closing. As business ramps, Steve will employ additional employees to help out with food prep, front restaurant help, as well as back kitchen activities such as dishes and clean up.

Personnel Plan Year 1 Steve employee 1 employee 2 employee 3 employee 4 Total People Year 2 Year 3

$24,000 $27,000 $30,000 $9,000 $10,800 $10,800 $9,000 $10,800 $10,800 $7,200 $10,800 $10,800 $5,400 $10,800 $10,800 5 5 5

Total Payroll

$54,600 $70,200 $73,200

Financial Plan
The following sections will detail important financial information.
7.1 Important Assumptions

The following table will detail important Financial Assumptions.

General Assumptions Year 1 Plan Month Current Interest Rate 10.00% 1 10.00% 10.00% 30.00% 0 Year 2 2 10.00% 10.00% 30.00% 0 Year 3 3

Long-term Interest Rate 10.00% Tax Rate Other 30.00% 0

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7.2 Break-even Analysis

The following table and chart show our Break-even Analysis.

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Break-even Analysis Monthly Revenue Break-even $9,799 Assumptions: Average Percent Variable Cost 27% Estimated Monthly Fixed Cost $7,149

7.3 Projected Profit and Loss

The following table and charts illustrate the Projected Profit and Loss.

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Pro Forma Profit and Loss Year 1 Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll $54,600 $70,200 $2,400 $5,004 $9,000 $3,600 $3,000 $10,530 $0 $103,734 $2,273 $7,277 $0 $682 $1,591 $73,200 $2,400 $5,004 $9,000 $3,600 $3,000 $10,980 $0 $107,184 $41,414 $46,418 $0 $12,424 $28,990 $68,673 $18,571 $0 $18,571 $50,102 72.96% $145,299 $39,292 $0 $39,292 $106,007 72.96% Year 2 $203,676 $55,079 $0 $55,079 $148,598 72.96% Year 3

Sales and Marketing and Other Expenses $2,400 Depreciation Rent Utilities Insurance Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit $5,004 $9,000 $3,600 $3,000 $8,190 $0 $85,794 ($35,691) ($30,688) $0 $0 ($35,691)

Net Profit/Sales

-51.97%

1.09%

14.23%

7.4 Projected Cash Flow

The following table and chart will indicate Projected Cash Flow.

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Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received $68,673 $68,673 $145,299 $145,299 $203,676 $203,676 Year 2 Year 3

Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment

$0 $0 $0 $0 $0 $0 $0 $68,673 Year 1

$0 $0 $0 $0 $0 $0 $0 $145,299 Year 2

$0 $0 $0 $0 $0 $0 $0 $203,676 Year 3

$54,600 $40,474 $95,074

$70,200 $67,160 $137,360

$73,200 $94,183 $167,383

$0

$0

$0

$0

$0

$0

$0

$0 $0 $0 $0 $0 $137,360 $7,939 $16,037

$0 $0 $0 $0 $0 $167,383 $36,293 $52,331

Long-term Liabilities Principal Repayment $0 Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $0 $0 $0 $95,074 ($26,401) $8,099

7.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Pro Forma Balance Sheet Year 1 Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets $25,000 $25,000 $10,008 $14,992 $31,030 Year 2 $25,000 $15,012 $9,988 $62,319 Year 3 $8,099 $0 $8,099 $16,037 $0 $16,037 $52,331 $0 $52,331 Year 2 Year 3

Accumulated Depreciation $5,004 Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities $4,287 $0 $0 $19,996 $28,095 Year 1

$5,630 $0 $0 $5,630 $0 $5,630 $65,000

$7,930 $0 $0 $7,930 $0 $7,930 $65,000

Subtotal Current Liabilities $4,287 Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings $0 $4,287 $65,000 ($5,500)

($41,191) ($39,601)

Earnings Total Capital

($35,691) $1,591 $23,809 $25,399 $31,030 $25,399

$28,990 $54,389 $62,319 $54,389

Total Liabilities and Capital $28,095 Net Worth $23,809

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7.6 Business Ratios

The following table displays Business Ratios of this company as well as those within the restaurant industry.

Ratio Analysis Year 1 Sales Growth Percent of Total Assets Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales 0.00% 28.83% 71.17% 100.00% 15.26% 0.00% 15.26% 84.74% 0.00% 51.68% 48.32% 100.00% 18.15% 0.00% 18.15% 81.85% 0.00% 83.97% 16.03% 100.00% 12.72% 0.00% 12.72% 87.28% 28.39% 37.68% 62.32% 100.00% 19.17% 29.21% 48.38% 51.62% 0.00% Year 2 111.58% 40.18% Year 3 Industry Profile 6.96%

Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage

100.00% 72.96%

100.00% 72.96%

100.00% 72.96%

100.00% 59.31%

124.93%

71.86%

58.72%

39.09%

0.00% -51.97%

0.00% 1.56%

0.00% 20.33%

2.75% 1.59%

1.89 1.89 15.26% -149.91% -127.04% Year 1 -51.97% -149.91%

2.85 2.85 18.15% 8.95% 7.32% Year 2 1.09% 6.26%

6.60 6.60 12.72% 76.14% 66.45% Year 3 14.23% 53.30%

1.26 0.87 54.38% 3.27% 7.17%

n.a n.a

10.44 27 2.44

12.17 26 4.68

12.17 26 3.27

n.a n.a n.a

0.18 1.00

0.22 1.00

0.15 1.00

n.a n.a

$3,812 0.00

$10,407 0.00

$44,401 0.00

n.a n.a

Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 0.41 15% 1.89 2.88 0.00 0.21 18% 2.85 5.72 0.00 0.31 13% 6.60 3.74 0.00 n.a n.a n.a n.a n.a

Financial Plan
The following sections will detail important financial information.
7.1 Important Assumptions

The following table will detail important Financial Assumptions.

General Assumptions Year 1 Plan Month Current Interest Rate 10.00% 1 10.00% 10.00% 30.00% 0 Year 2 2 10.00% 10.00% 30.00% 0 Year 3 3

Long-term Interest Rate 10.00% Tax Rate Other 30.00% 0

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7.2 Break-even Analysis

The following table and chart show our Break-even Analysis.

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Break-even Analysis Monthly Revenue Break-even $9,799 Assumptions: Average Percent Variable Cost 27% Estimated Monthly Fixed Cost $7,149

7.3 Projected Profit and Loss

The following table and charts illustrate the Projected Profit and Loss.

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Pro Forma Profit and Loss Year 1 Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll $54,600 $70,200 $2,400 $5,004 $9,000 $3,600 $3,000 $10,530 $0 $103,734 $2,273 $7,277 $0 $682 $1,591 $73,200 $2,400 $5,004 $9,000 $3,600 $3,000 $10,980 $0 $107,184 $41,414 $46,418 $0 $12,424 $28,990 $68,673 $18,571 $0 $18,571 $50,102 72.96% $145,299 $39,292 $0 $39,292 $106,007 72.96% Year 2 $203,676 $55,079 $0 $55,079 $148,598 72.96% Year 3

Sales and Marketing and Other Expenses $2,400 Depreciation Rent Utilities Insurance Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit $5,004 $9,000 $3,600 $3,000 $8,190 $0 $85,794 ($35,691) ($30,688) $0 $0 ($35,691)

Net Profit/Sales

-51.97%

1.09%

14.23%

7.4 Projected Cash Flow

The following table and chart will indicate Projected Cash Flow.

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Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received $68,673 $68,673 $145,299 $145,299 $203,676 $203,676 Year 2 Year 3

Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment

$0 $0 $0 $0 $0 $0 $0 $68,673 Year 1

$0 $0 $0 $0 $0 $0 $0 $145,299 Year 2

$0 $0 $0 $0 $0 $0 $0 $203,676 Year 3

$54,600 $40,474 $95,074

$70,200 $67,160 $137,360

$73,200 $94,183 $167,383

$0

$0

$0

$0

$0

$0

$0

$0 $0 $0 $0 $0 $137,360 $7,939 $16,037

$0 $0 $0 $0 $0 $167,383 $36,293 $52,331

Long-term Liabilities Principal Repayment $0 Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $0 $0 $0 $95,074 ($26,401) $8,099

7.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Pro Forma Balance Sheet Year 1 Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets $25,000 $25,000 $10,008 $14,992 $31,030 Year 2 $25,000 $15,012 $9,988 $62,319 Year 3 $8,099 $0 $8,099 $16,037 $0 $16,037 $52,331 $0 $52,331 Year 2 Year 3

Accumulated Depreciation $5,004 Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities $4,287 $0 $0 $19,996 $28,095 Year 1

$5,630 $0 $0 $5,630 $0 $5,630 $65,000

$7,930 $0 $0 $7,930 $0 $7,930 $65,000

Subtotal Current Liabilities $4,287 Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings $0 $4,287 $65,000 ($5,500)

($41,191) ($39,601)

Earnings Total Capital

($35,691) $1,591 $23,809 $25,399 $31,030 $25,399

$28,990 $54,389 $62,319 $54,389

Total Liabilities and Capital $28,095 Net Worth $23,809

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7.6 Business Ratios

The following table displays Business Ratios of this company as well as those within the restaurant industry.

Ratio Analysis Year 1 Sales Growth Percent of Total Assets Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales 0.00% 28.83% 71.17% 100.00% 15.26% 0.00% 15.26% 84.74% 0.00% 51.68% 48.32% 100.00% 18.15% 0.00% 18.15% 81.85% 0.00% 83.97% 16.03% 100.00% 12.72% 0.00% 12.72% 87.28% 28.39% 37.68% 62.32% 100.00% 19.17% 29.21% 48.38% 51.62% 0.00% Year 2 111.58% 40.18% Year 3 Industry Profile 6.96%

Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage

100.00% 72.96%

100.00% 72.96%

100.00% 72.96%

100.00% 59.31%

124.93%

71.86%

58.72%

39.09%

0.00% -51.97%

0.00% 1.56%

0.00% 20.33%

2.75% 1.59%

1.89 1.89 15.26% -149.91% -127.04% Year 1 -51.97% -149.91%

2.85 2.85 18.15% 8.95% 7.32% Year 2 1.09% 6.26%

6.60 6.60 12.72% 76.14% 66.45% Year 3 14.23% 53.30%

1.26 0.87 54.38% 3.27% 7.17%

n.a n.a

10.44 27 2.44

12.17 26 4.68

12.17 26 3.27

n.a n.a n.a

0.18 1.00

0.22 1.00

0.15 1.00

n.a n.a

$3,812 0.00

$10,407 0.00

$44,401 0.00

n.a n.a

Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 0.41 15% 1.89 2.88 0.00 0.21 18% 2.85 5.72 0.00 0.31 13% 6.60 3.74 0.00 n.a n.a n.a n.a n.a

History of Burger The origin of hamburger is a bit hazy and unclear. This is because there is no proper documentation to give us an idea about how the fast food came into being. Still, many people have claimed that the hamburger 'patty' was first noticed in the medieval times. Tartars (a band of Mongolian and Turkish warriors) used to place pieces of beef under their saddles. Under the weight of the rider and the saddle, the pieces used to turn tender enough to be eaten raw. Thus was born the initial beef patty.

A food item resembling the present-day burger, to some an extent, reached America around the 19th century. The dish, called Hamburg style beef, was brought to Hamburg (Germany) from Russia in the 14th century and when the German immigrants arrived in America, they brought it along with them. With time, the raw, chopped piece of beef evolved into the patty sandwiched in a bun. Thus, it can be said that America had a major role in giving the world the hamburger, as we know of it today.

The Claims Though it is true that Americans are largely responsible for shaping the burger into its present form, there is a dispute as to who was actually instrumental in bringing about the change. Amongst the major claims are:

Wisconsin

It has been claimed that Wisconsin is the 'Home of the Hamburger'. It is said that Charles Nagreen started a meatball business, at the Outagamie County Fair, at the age of 15. Since his meatballs were hard to handle while strolling around, the business turned to be a flop. It was then that Nagreen got the idea of flattening the meatballs and placing them between bread slices. In fact, it is also said that he was the one who gave hamburger its name.

Ohio Hamburger is also said to have originated in Stark County (Ohio), by Frank and Charles Menches. The claims say that Frank and Charles used to travel in a number of fair every year, selling sausage patty sandwiches. In 1885, while selling sandwiches at the Erie Country Fair (Hamburg, New York), they ran out of pork and decide to substitute ground beef for the same. Thy also named the new dish 'hamburger' after Hamburg, the place where the fair was being held.

Connecticut Yet another claim traces the history of hamburgers to New Haven, Connecticut. It is said that Louis Lassen had a luncheonette in New Haven. One fine day in 1890, one of his customers was in hurry and had to eat on the run, so he ground up some beef and served it in the form of a sandwich. With this, was born the hamburger of the present times.

Texas

Last, but not the least, is the claim related to the St Louis World Fair (1904). A man named Fletch 'Old Dave' Davis, from Athens (Texas), decided to try something new one day. He grilled a raw hamburger steak to crisp brown and sandwiched it between two thick slices of homemade toast, adding a slice of raw onion on top. His patrons instantly fell in love with the dish & soon, its popularity increased to a large extent. In fact, it is also said that he was the one who served fried potato strips with hamburgers, at St Louis World Fair, for the first time.

New York: DuMont Burger

DuMont Burger, 314 Bedford Ave, Brooklyn, NY 11211 (718-384-6128)

The hamburger at DuMont Restaurant in Williamsburg, Brooklynfoodie central in recent yearswas so good they opened a dedicated shop cross town named after the dish. The key to success: perfect balance of great raw ingredients. The lightly toasted, gently domed brioche bun is neither so fluffy that it dominates the sandwich nor so thin that the thing breaks apart willynilly in your hands. The bun-to-burger ratio works; the brioche absorbs the meat's juices as it should. Vibrant veggiesBibb lettuce, sliced tomato, shaved red onion, and house-made picklesare served on the side so you can either handpick the amount of toppings you want or just place the whole heap on top of the patty (eight ounces of 80% lean ground chuck from cows raised on grass and corn). The end product stands approximately four inches high, a monument of beef surrounded by golden fries just begging to be squashed down to mouth size and consumed. Big appetites can add cheese (American, Cheddar, Monterey Jack, Danish Blue, Gruyre) or other toppings (bacon, avocado, caramelized onions, sauted mushrooms) for a buck or two more. Small appetites will appreciate the mini burgerswhich pack the same oomph into five-ounce patties

Miami: Kingdom

6708 Biscayne Blvd., Miami, FL (305-757-0074)

Miami's best burger doesn't don any designer toppings or fancy homemade bread. Instead, patrons of this raucous Biscayne Corridor dive bar get a simple, evenly formed, char-grilled patty of chopped sirloin served on a lightly toasted sesame-seed bun. Owner Justin Hughes won't divulge the secret subtle seasonings, but standard toppings include romaine lettuce, a slice of tomato, red onions, and choice of melted cheeseplus a combo of sauces featuring chipotle with a kick. Kingdom's smallest and most recommended burger, The Queenburger, is a grand halfpounder, while the King version boasts 12 ounces of beef. The 24-ounce Doomsday is offered free for anyone who can finish italong with a side of the addictive herb-flecked fries and onion ringsin less than 15 minutes. Victoria Pesce Elliott, Miami Herald restaurant critic

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Washington, DC: Palena Caf

3529 Connecticut Ave. NW, Washington, DC (202-537-9250) Chef Frank Ruta may not be a household name, but he worked at the most famous house in the countrycooking for the Reagan and Bush families in the White House. He left in 1991, and

ultimately decided to open a place where food comes before fame. At Palena's intimate 30-seat caf, he keeps thing simple. Consider his hamburger, the best in the capital. It's shaped from hand-ground beef that includes Kobe-style trimmings when available; slipped into a glossy bun that's baked in-house; slathered with a garlicky mayonnaise; and accessorized with terrific sweet pickles. The combinationthere's a hint of truffled Italian cheese in there, toois exquisite and the price is right: $12 for a sandwich that comes with a side of pedigree. Tom Sietsema, Washington Post food criti

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Washington, DC: Palena Caf

3529 Connecticut Ave. NW, Washington, DC (202-537-9250) Chef Frank Ruta may not be a household name, but he worked at the most famous house in the countrycooking for the Reagan and Bush families in the White House. He left in 1991, and ultimately decided to open a place where food comes before fame. At Palena's intimate 30-seat caf, he keeps thing simple. Consider his hamburger, the best in the capital. It's shaped from

hand-ground beef that includes Kobe-style trimmings when available; slipped into a glossy bun that's baked in-house; slathered with a garlicky mayonnaise; and accessorized with terrific sweet pickles. The combinationthere's a hint of truffled Italian cheese in there, toois exquisite and the price is right: $12 for a sandwich that comes with a side of pedigree. Tom Sietsema, Washington Post food criti

San Francisco: Zuni Caf

1658 Market S. (near Franklin) San Francisco, CA (415-552-2522) When anyone mentions hamburgers in San Francisco, one name immediately comes to mind: Zuni Caf. While Bay Area residents can't agree on politicsor the best burrito, for that matterthe general consensus is that this is the best burger. Chef/owner Judy Rodgers buys chunks of chuck and liberally salts the meat before going home at night. The next day she and her crew grind the meat, salt and all. The salt seasons the meat so the thick grilled patty releases a gush of liquid with each bite. It's served on a square of grilled rosemary-scented focaccia, generously slathered with garlicky a oli, and accompanied by house-made pickled zucchini ribbons and onion strips. The burger can be ordered with Roth Kase Private Reserve (an Alpinestyle raw-cow's-milk cheese aged ten months), Mountain Gorgonzola, grilled onions, or portobello mushrooms, but why mess with perfection? Note: The Hamburger is served at lunch and after 10 p.m. only. Michael Bauer, San Francisco Chronicle restaurant critic

Los Angeles: Pie 'n Burger

913 E. California Blvd. Pasadena, CA (626-795-1123) Though it faces stiff competition from Tommy's, Irv's, and In-N-Out, Pasadena's Pie 'n Burger makes the best hamburger in L.A. The restaurant has stood on a leafy street near Cal-Tech and the Huntington Gardens since 1963. With swiveling wooden stools and paneled walls, the local institution feels vaguely clubby. Waitresses know customers by name. On the pie counter an old Hamilton Beach shake maker stands poised for duty. The burger is a thing of beauty; the bun is toasted on the griddle, the layers of iceberg lettuce and pickle chips accentuate the sear of the patty, and the dab of cool Thousand Island dressing brings the preparation into the realm of perfection. Patric Kuh, Los Angeles Magazine restaurant critic

Philadelphia: Rouge

205 S. 18th St. Philadelphia, PA (215-732-6622) Take a look at what diners are eating at the sidewalk caf tablesany time of dayand you'll notice a phenomenon unexpected in a city that lends its name to another meat sandwich: People in startlingly high numbers downing the Rouge Burger. This 12-ounce hunk of well-seasoned beef comes with nutty Gruyre, caramelized onions, and a haystack of pommes frites. And the dish trumps any of the very fine burgers served at Philly's many gastropubs. Rouge, indeed, is relatively glamorous. Overlooking Rittenhouse Square and, inside, posh, with cushy banquettes and booths and a central bar populated by beautiful people, it's a bona-fide Parisian caf whose signature dish has become that perfectly proportioned combo of juicy beef, cheese, and bun. The cheesesteak, at least at this address, is all but forgotten. Andrea Clurfeld, Asbury Park Press restaurant critic

Atlanta: Holeman & Finch

2277 Peachtree Road, Atlanta, GA (404-948-1175) Best flipped upside down and eaten as fast as humanly possible to manage its gushiness, the burger created by Chef Linton Hopkins is as much an event as it is a sandwich. A bullhorn sounds at 10 p.m. (official burger time), and the crowd goes wild. Hesitate a minute and the limited quantity (they make only two dozen a night) will be gone. The glossy buns baked in their bakery next door contain two patties of freshly ground, grass-fed beef (chuck and brisket in equal proportions), a slice of Kraft American cheese, a pinch of raw red onion, bread-and-butter pickles, homemade ketchup, and yellow mustard. Crisp golden fries are part of the deal. Those who miss out on the burger can always come back for Sunday brunch, when the kitchen makes 72 of them. Christiane Lauterbach, Atlanta Magazine restaurant columnist

Boston: Radius

8 High St. Boston, MA (617-426-1234) Boston's hamburger identity was long defined by Mr. Bartley's Gourmet Burgers, a quirky little Harvard Square diner with a long list of patties named after local politicians (the "Mitt Romney") and Red Sox greats (the "Manny Ramirez"). Then, last year, Bartley's burger was unseated by a posh upstart, the Schlow Burger. Named after its creator, Radius executive chef/co-owner Michael Schlow, this addictive stuffer took top honors at the 2008 South Beach Wine & Food Festival Burger Bash. And while Bartley's remains solidly good, nothing quite beats the decadence of Schlow's half pound of ground chuck, crowned with melted Cheddar, slathered with horseradish sauce, and piled high with crispy fried onions. Served on brioche, it's an intense jumble of oniony sweetness, umami, tang, and drip-down-your-chin juiciness. Note: The burger is available at lunch in the main dining room, but at dinner, you'll find it only at the bar, so plan accordingly. Amy Traverso, Boston Magazine food editor

Chicago: Rosebud Steakhouse

192 E. Walton St. Chicago, IL (312-397-1000) Any city that glorifies steak as much as Chicago does is going to be a great burger town, too. What makes Rosebud's burger the very best? It starts with 12 ounces of custom-ground prime beef, about 80-percent lean, cooked with steakhouse precision and placed on a yielding but substantial pretzel bun that easily handles the burger's weight and juiciness. The meat is slightly sweet but with a beefy tang and richness that makes melted cheese utterly superfluous. All this in a splendid white-tablecloth, cherrywood-clad dining room. The burger is the star of the lunch menu and technically is only on the bar menu at night, but the truth is that you can ask for the burger anywhere in the dining room and the waiters won't bat an eye. Standard features include lettuce, tomato, pickle, and hot, bistro-thin fries. Optional equipment includes cheese, applewood bacon, caramelized onions, or mushrooms

New Orleans: Port of Call

838 Esplanade Ave. New Orleans, LA (504-523-0120) It comes as a surprise to some that one of the most popular restaurants in all of the French Quarter is a hamburger place that serves nothing remotely indigenous: no gumbo, no jambalaya, no seafood of any kind. It is called Port of Call, and yes, its burgers are that good. The beef is fresh-ground daily and hand-formed into burly patties that are char-scarred on the grill. This being New Orleans, there are some quirks: If you want grated Cheddarin addition to the lettuce, tomatoes, onion, and picklesit isn't melted, they serve the burger with baked potatoes on the side (no fries here), and chives and Bacon Bits are available at no charge. Many customers wash their burgers back with a nuclear-strength punch. An hour-plus wait for a table is a nearguaranteeand worth it. Brett Anderson, The Times-Picayune restaurant crit

Santa Fe: Bobcat Bite

420 Old Las Vegas Highway, Santa Fe, NM (505-983-5319) National media attention is nothing new to Bobcat Bite; the fame goes back to 1953, when a Santa Fe rancher named Rene Clayton turned a roadside trading post (and former gun shop) into a 25-seat mom-and-pop diner. It's been operated over the years by a succession of couples. The meal of choice since the early days has been a grilled green-chile cheeseburger (including Cheddar, lettuce, tomato, and onion) using ten ounces of freshly ground Colorado beef made from choice whole boneless chuck, ground fresh daily. No one in the state makes a better version of this New Mexico favorite. You pay for it the same way they did 50 years ago: cash only. Cheryl Alters Jamison & Bill Jamison, food and travel authors

Is McDonalds turning its back on the United States? If so, it wouldnt be totally surprising. In 2008, McDonalds Corp.s same-store sales were up 8.5% in Europe and 9% in Asia/Pacific/MidEast/Africa but only 4% in the U.S.

Is that why Switzerland gets the fabulous Der M (at r.) and we dont? It looks even tastier than our Big N Tasty, especially with that very European roll, what advertising identifies as Batavia lettuce and Emmental cheese. McDs is marketing the same sandwich in Spain (dont tell them they got stiffed on the Batavia lettuce) under the name El Mac (La carne por excelencia). Der M is just one of the sophisticated and enticing burgers that McDonalds is marketing around the worldbut not here. When was the last time the chain added an excelencia burger to its U.S. menu? Enough with the salads and the SnackWraps! Here are 9 more global creations Id be happy to see at my McDrive-thru: McFarm, Greece. Two all-pork patties, mustard sauce, processed cheese, iceberg lettuce, slivered onions, bacon and tomato on a sesame-seed bun. The Greeks apparently dont have a colloquialism equivalent to buying the farm, which is unfortunate because they could have a good laugh when ordering this.

Swiss Fondue (l.), Slovakia. One of the great things about McDonalds is that it is at once both global and local, resulting in a weird mix of languages on its menus. McDs must have cornered the market on Emmental cheese because its part of the Swiss Fondue build and dozens of other Euro-burgers. However, the menu also includes the whimsically named Cheese & Fresh burger that subs in that pepper-Jack cheese that Slovakians love, I guess. Both are on bakery buns that are too good for Americans.

Big Tasty Met Bacon (r.), The Netherlands. Sounds like When Harry Met Sally doesnt it? Like a Big N Tasty but with, yep, bacon and Emmental cheese on a cool, really seedy bun. Tirolese Burger, Italy. The Taste of the Tirolese Mountains according to its ads, which translates to cipollini onions and speck (smoked ham). Meanwhile, the Italian Big Tasty Bacon burger is hyped as An Explosion of Rustic Goodness. Youd have to try that, too.

Ruis McFeast, Finland. OK, this one (below) looks a little nasty. It piles beef, tomato, lettuce and cheese on a dark-brown bun that looks smashed, like the burgers you really get from most drive-thru windows, or like two large but unappetizing chocolate cookies. Still, its more interesting than a regular U.S. McDs cheeseburger. The Winter Feast, United Kingdom. Sounds as though it could be a previously undiscovered work of the Bard but no, its a burger with our new friend Batavia lettuce plus streaky bacon,

chorizo, cheese made from Emmental, [and] rich tomato sauce all in a chive topped oval water split bun. I dont know what a water-split bun is, but it sounds soggy. El Maco Grande, Denmark. A cactus in a sombrero strumming a guitar in ads promoting this? You must be in Denmark! Also available is sandwich sibling Chicken El Maco. The Mexican inspired sandwiches (at r.) each have Cheddar cheese (Emmental apparently being withheld from the Danes), tomato, lettuce, some Danish take on salsa andthat Mexican favoritesourcream-chive sauce. Lemme hear you say Ole. Ciabatta Grande Deluxe, Belgium. Not to be outdone by the Danes, the Flems strike back with a two-cheese (Emmental and Cheddar) burger with tomatoes, onions and lettuce on un pain ciabatta authentique, a deft swipe at anyone serving inauthentic ciabatta

Top 10 Best Burgers Under P100 in Manila


Published: Aug 27, 2010 - 7:00pm

2. DAYRIT'S 31st Street, Bonifacio Stop-over, Fort Bonifacio Global City, Taguig Tel. no. 818-0168 Open from 8 a.m. to 9 p.m. daily Burger lowdown: Dayrit's Junior Burger Todo (P90) may be a miniature version of its bigger and pricier Cheeseburger Todo, but it still packs a lot of burger punch. The beef patty is grilled well and complemented by a special burger sauce that tastes a bit like gravy. Best of all, it has fresh tomato, lettuce, and cucumber in it. You can tell because they're crunchy and juicy. The sesame seed buns likewise taste great. Foodie fuss: More sesame seeds on the top bun, please.

1. WHAM! BURGERS Level 5, Shangri-La Plaza Mall, EDSA corner Shaw Boulevard, Mandaluyong City Open 10 a.m. to 9 p.m. daily Tel. no. 634-2093 Burger lowdown: The Wham! Burger (P98) is easily a carnivore's delight. It boasts of a char-grilled 1/3 pound beef patty that can put more expensive fastfood burgers to shame. Sandwiched by sesame seed buns, it also contains a slice of tomato and lettuce. Ketchup and mustard complete this power burger's ingredients. Foodie fuss: The lettuce was a bit limp--but that may be beside the point. The beef patty more than makes up for it.

Top 10 Best Burgers Under P100 in Manila


Published: Aug 27, 2010 - 7:00pm

8. WENDY'S With branches all over Metro Manila. Burger lowdown: To complement the beef patty, Wendy's Cheeseburger Deluxe (P65.75) has a slice of cheddar cheese, tomato, pickles, lettuce, and one raw red onion ring. Sandwiched by two plain buns, the burger's taste is amped up by the raw onion ring. Foodie fuss: We wouldn't mind about a couple more raw onion rings. We do, however, appreciate the very light coating of the ketchup-mayonnaise mix.

7. MAX'S Level 2, SM City North EDSA, North Avenue corner EDSA, Quezon City with various branches Tel. no. 928-3405 Open from 10 a.m. to 9 p.m., Monday to Thursday and Sunday; 10 a.m. to 10 p.m. Friday to Saturday Burger lowdown: Max's Chicken Burger (P71) features a chicken meat patty topped with creamy coleslaw and a slice of cheddar cheese. The burger's top bun also has a smattering of sesame seeds. The pickles are served separately. This is a delicious-yet-unexpected innovation from a restaurant that's identified as a fried chicken spot. Foodie fuss: This is the only burger that's served with about half a cup of potato chips on the side. Plus, you don't have to wait in line for it.

Top 10 Best Burgers Under P100 in Manila


Published: Aug 27, 2010 - 7:00pm

6. MUSHROOMBURGER No. 297 Katipunan Avenue, Loyola Heights, Quezon City

Tel. no. 882-8888 Open from 7 a.m. to 11 p.m. daily Burger lowdown: The Mushroomburger Royal (P71) boasts of a hefty and juicy mushroom patty sandwiched by two plain buns. It contains cheddar cheese, a slice of tomato, cucumber, pickles, as well as some ketchup-mayonnaise mix. The light buttery taste is good enough to make you forget that you're not eating meat. Foodie fuss: If you're into eating healthy, this isn't it yet. Not that we're complaining.

5. GOOD BURGERS 1/F Connecticut Carpark, Greenhills Shopping Center, San Juan, Metro Manila with other branches in Annapolis, San Juan (723-4663), Quezon City (435-4663) and Pasig (9108138) Tel. no. 345-4442 Open from 11 a.m. to 10 p.m. daily Burger lowdown: The Just Burger Best (P85) is a no-nonsense creation featuring a lean chicken meat patty sandwiched by plain buns and seasoned with a mayonnaise-ketchup mix. You add P5 if you prefer wheat buns. The patty is nicely moist. Nothing gets in the way of its flavor. Plus, hardcore vegetarians can opt for the veggie patty for their burger.

Foodie fuss: How about a slice of tomato served on the side? The yummy burger looks so lonely. But, then again, that's just us
ublished: Aug 27, 2010 - 7:00pm

4. TROPICAL HUT Elliptical Road, Quezon Memorial Circle, Diliman, Quezon City with various branches Tel. no. 924-3413 Open from 7:00 am to 9:00 pm daily Burger lowdown: The Super Cheeseburger Classic (P90) lives up to its name. The moist beef patty is sandwiched by sesame seed buns that are firm on the outside and fluffy inside. It also contains a slice of cheddar cheese, tomato, cucumber, and lettuce. A light coating of mayonnaise finishes it off. Foodie fuss: We wonder why this burger chain isn't getting much buzz these days. Hopefully, our renewed appreciation for its burgers will help.

3. HUNGRY HIPPO Prince David Condominium, 305 Katipunan Avenue, Loyola Heights, Quezon City with various branches Tel. no. 434-1184 Open from 7:00 am to 10:00 pm daily Burger lowdown: It's hard to believe that Hungry Hippo's Cheeseburger (P67) is still priced so low. It's as if this little-known chain was spared from the economic upheavals of recent years. This burger boasts of a perfectly grilled beef patty that's made more delicious by cheddar cheese and mayonnaise. You can ignore its vegetables (tomato, cucumber, and lettuce) and the sesame seed buns. The real star is the patty. Foodie fuss: We want this burger to stay just the way it is--pocket-friendly price and all.

The burger's culinary history is a complicated one. In the website What's Cooking America, author Linda Stradley writes, "Tracing history back thousands of years, we learn that even the ancient Egyptians ate ground meat, and down through the ages we also find that ground meat has been shaped into patties and eaten all over the world under many different name." That being said, the burger, which is composed of a meat patty sandwiched by two buns, has become the most universally loved fastfood. While the most popular kind features a beef patty, other meat and non-meat variants have also become favorites. SPOT.ph ranks 10 under P100 burgers in Metro Manila according to their bang-for-your-buck goodness.

10. SANGO! Power Plant Mall, Rockwell Center, Makati City with various branches Tel. no. 501-3106 Open from 11 a.m. to 11 p.m., Monday to Thursday and 11 a.m. to midnight, Friday to Sunday Burger lowdown: Sango!'s Hamburger (P95) contains a beef patty loaded with minced onion, mustard, and ketchup. Its plain bread buns are fluffy and firm, complementing the not-so-typical filling. Bottom line: The buns seal the deal. Foodie fuss: If you're used to Jollibee and McDonald's hamburgers, this one may not tickle your taste buds.

9. SLAMMER BURGERS M2 Level, Food Choices, Trinoma Mall, Quezon City with various branches Open from 10 a.m. to 9 p.m., Monday to Thursday and 10 a.m. to 10 p.m., Friday to Sunday Burger lowdown: These three-inch-wide burgers always come in twos. We got their Bacon Mushroom Melt Burger (P85) and found them tasty. The cheese spread blended nicely with the little patties, the chopped bacon, and the mushroom bits. Don't let their size or nondescript appearance fool you. They're really quite filling. Foodie fuss: We wonder why they can't just make one bigger burger instead of serving two small ones

America's Best Burgers


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Photo: Anne Hamersky San Francisco: Burger Joint

The Burger: Burger Joint is a retro, 50s-style indie chain with five locations in the Bay Area. In keeping with the righteous NoCal foodie movement, the old-fashioned burger here is grilled to order with hormone- and pesticide-free natural beef from Niman Ranch and is served on a toasted sesame bun with mayonnaise, lettuce, tomato, red onion, and pickle slices. Best Sides: Fresh thick-cut fries and a chocolate milkshake made with San Franciscos own Double Rainbow ice cream.

merica's Best Burgers


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Photo: Courtesy of Dyers on Beale Memphis: Dyers Burger

The Burger: Grease is the word at Dyers Burger, a Memphis institution since 1912. The pounded-thin, all-beef patties at this caf are dunked in a cast-iron skillet of boiling hot vegetable oil. The meat turns crunchy as the fry cook flips it onto a squishy Wonder Bread bun. Only mustard, pickles, and onions accompany. Many die-hards favor the triple triple combo: three patties stacked between molten slices of processed American cheese. Best Sides: Add more vitamin G to your diet with onion rings, chili cheese fries, and a deepfried Twinkie.

America's Best Burgers


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Photo: Anna Knott Chicago: Duchamp

The Burger: Duchamp is almost too upscale to deserve mention on this list, except for the fact that in a city famed for its love of red meat, this one is a whopper. Chef Michael Taus bakes Czechoslovakian cottage-cheese-and-dill rolls from his grandmothers recipe to pair with an eight-ounce burger, made with ground chuck blended with trimming scraps from local meat purveyor L&L Packing Company. Best Sides: Garlic-and-Romano cheese fries.

merica's Best Burgers


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Photo: Courtesy of Frank Aymani New Orleans: Lke

The Burger: Lke is an old-timey brasserie owned by chef John Besh, who may cook fancier fare at Restaurant August but knows that a 10-ounce Charolais top round beef patty and housemade onion roll doesnt need to be gussied up for a lunch date in downtown New Orleans. Well, he does top it with ripe tomatoes, Emmentaler cheese, caramelized onions, and thick slabs of country bacon from Alan Bentons famed smokehouse in the mountains of Tennessee. But thats just gracious southern hospitality for you. Best Sides: Seafood gumbo and a custom-brewed Lke Alt pilsner.

America's Best Burgers


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Photo: Jason Alfred Seattle: Quinns Pub

The Burger: Gastropub is one of those words real lumberjacks cant say with a straight face, but they still come out of the Pacific North woods for the hungry-man special burger at Quinns Pub, an inviting Capitol Hill eatery where eight ounces of natural Painted Hills Ranch beef is topped with cheddar, bacon, and mayonnaise. Best Sides: More meat! Order the wild boar sloppy joe and beef tongue hash with a fried duck egg.

America's Best Burgers


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Photo: Kelly Kirlin Austin, TX: Ranch 616

The Burger: Ranch 616 is a South Texasstyle diner that skews south of the border. The Chili and Fritos burger is quite the Tex-Mex mix: its an eight-ounce beef patty stuffed with crunchy corn chips, homemade chile con carne, pico de gallo, and tomatillo crema. But its the Framed Burger that takes the prize. Its filled daily with different fixingsMaytag blue, cremini mushrooms, jalapeo pepperson the short-order cooks whim. And its worth stopping by on performance nights for live country by Lucas Hudgins & the First Cousins. This is Austin, after all. Best Sides: The Texas Gulf Coast crab-and-fish cake and the fried fruit pies with Mexican vanilla ice cream.

America's Best Burgers


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Photo: Kaori Sonoda Haleiwa, HI: KuaAina Sandwich Shop

The Burger: For the past 25 years, this breezy spot on Oahus North Shore has been serving up half-pound charbroiled burgers topped with slices of fresh, island-grown avocado or pineapple on a kaiser roll to the protein-loving surf crowd that hangs ten on the Pipeline. Best Sides: Shoestring fries.

America's Best Burgers


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Photo: Len Depas/Kemble Park Tavern Washington, D.C.: Kemble Park Tavern

The Burger: Given the New Austerity sweeping the capital, lobbyists are loving the street cred they garner by trading prime rib for Americas favorite combo meal. On weekends, cozy Kemble Park Tavern serves a terrific brunch burger, topped with a fried egg and bacon, on a brioche bun. And for those who need a little extra pork in their barrel, theres whole hog sausage on the side. Best Sides: Breakfast potatoes, scrapple, Byrd Mill grits.

merica's Best Burgers


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Photo: Jeanmarie Theobalds; Britany Westphal New York City: Back Forty and Black Iron Burger Shop

The Burgers: The Big Apples best burgers are being served up a few blocks from each other in the East Village. At the gritty, no-attitude Black Iron Burger Shop, the house special, the Iron Horse, is made with two patties topped with grilled onions and horseradish cheddar. A few streets north at Back Forty, chef Peter Hoffmans sleeker homage to down-home cooking, the grass-fed beef burger is paired with heritage bacon, farmhouse cheddar, spicy ketchup, and a big sour pickle. Best Sides: Rosemary fries and a malted milkshake at Black Iron; salt cod hush puppies and crispy onion rings at Back Forty.

America's Best Burgers


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Photo: Courtesy of Murphys Hanover, NH: Murphys on the Green

The Burger: Murphys on the Green is a classic Yankee college town tavern fraternized in equal number by tweedy Dartmouth professors, honor roll students, and townie regulars. Members of the Theta Delta Chi chapter pledge their loyalty to the Murph Burger, a half-pound Angus beef patty with crispy shallots, rmoulade, bacon, and plain old American cheese. Best Sides: Cheddar cheese fritters, fried buffalo wings, and New England clam chowda.

Burger King Corporation - Company Profile, Information, Business Description, History, Background Information on Burger King Corporation
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5505 Blue Lagoon Drive Miami, Florida 33126 U.S.A. Company Perspectives: Burger King is flamed-broiled burgers, fries and soft drinks at a good value, served quickly and consistently by friendly people in clean surroundings.

History of Burger King Corporation


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Burger King Corporation is the second largest fast-food chain in the United States, trailing only McDonald's. The company franchises more than 10,400 restaurants and owns about 1,000 for a chainwide total exceeding 11,455, with locations in all 50 states and 56 countries. The company serves 15.7 million customers each day and over 2.4 billion Burger King hamburgers are sold each year across the globe. In the late 1990s and into the new millennium, Burger King was plagued by falling sales and deteriorating franchisee relationships. Burger King's parent, Diageo plc, sold the company to a group of investors led by Texas Pacific Group in late 2002. Rapid Growth under Company Founders: 1954-67 Miami entrepreneurs James McLamore and David Edgerton founded Burger King Corporation in 1954. Five years later, they were ready to expand their five Florida Burger Kings into a nationwide chain. By the time they sold their company to Pillsbury in 1967, Burger King had become the third largest fast-food chain in the country and was on its way to second place, after industry leader McDonald's. The story of Burger King's growth is the story of how franchising and advertising developed the fast-food industry. McLamore and Edgerton began in 1954 with a simple concept: to attract the burgeoning numbers of postwar baby boom families with reasonably-priced, broiled burgers served quickly. The idea was not unique: drive-ins offering cheap fast food were springing up all across America in the early 1950s. In fact, 1954 was the same year Ray Kroc made his deal with the McDonald brothers, whose original southern California drive-in started the McDonald's empire. McLamore and Edgerton tried to give their Burger King restaurants a special edge. Burger King became the first chain to offer dining rooms (albeit uncomfortable plastic ones). In 1957 they expanded their menu with the Whopper, a burger with sauce, cheese, lettuce, pickles, and tomato, for big appetites. But prices were kept low: a hamburger cost 18 cents and the Whopper 37 cents. (McDonald's burgers at the same time, however, cost only 15 cents.) In 1958 they took advantage of an increasingly popular medium, television: the first Burger King television commercial appeared on Miami's VHF station that year.

By 1959 McLamore and Edgerton were ready to expand beyond Florida, and franchising seemed to be the best way to take their concept to a broader market. Franchising was booming in the late 1950s because it allowed companies to expand with minimal investment. Like many other franchisers, McLamore and Edgerton attracted their investors by selling exclusive rights to large territories throughout the country. The buyers of these territorial rights, many of them large businesses themselves, could do what they wanted to in their territory: buy land, build as many stores as they liked, sell part of the territory to other investors, or diversify. McLamore and Edgerton took their initial payments (which varied with the territory) and their cut (as little as 1 percent of sales) and left their franchisees pretty much on their own. The system worked well, allowing Burger King to expand rapidly. By 1967, when the partners decided to sell the company they had founded, the chain included 274 stores and was worth $18 million to its buyer, prepared-foods giant Pillsbury. Difficulties with Franchisees Under Pillsbury: 1967-77 The Burger King franchising system also worked well for the franchisees. Under the early Burger King system, some of the company's large investors expanded at a rate rivaling that of the parent company. Where this loosely knit franchising system failed, however, was in providing a consistent company image. Because McLamore and Edgerton didn't check on their franchises and used only a small field staff for franchise support, the chain was noted for inconsistency in both food and service from franchise to franchise, a major flaw in a chain that aimed to attract customers by assuring them of what to expect in every Burger King they visited. It was up to the new owner, Pillsbury, to crack down on franchise owners. But some large franchisees thought they could run their Burger King outlets better than a packaged-goods company. Wealthy Louisianans Billy and Jimmy Trotter bought their first Burger King outlet in 1963. By 1969, they controlled almost two dozen Burger King restaurants and went public under the name Self Service Restaurants Inc. In 1970, when the franchisees in control of the lucrative Chicago market decided to sell out, Billy Trotter flew to Chicago in a snowstorm to buy the territory for $8 million. By the time Pillsbury executives got to town the next day, they found they had been bested by their own franchisee. The Trotters didn't stop there. By 1971 they owned 351 stores with sales of $32 million. They bought out two steak house chains (taking the name of one of them, Chart House), established their own training and inspection programs, and decided on their own food suppliers. By 1972 they were ready to take over altogether; the Trotters made Pillsbury a $100 million offer for Burger King. When that initiative failed, they suggested that both Pillsbury and Chart House spin off their Burger King holdings into a separate company. When that also failed, they continued to acquire Burger King piecemeal, buying nine stores in Boston and 13 in Houston. However, Pillsbury wasn't about to allow Chart House to gain other valuable territories. They sued the Boston franchisees who had sold to Chart House, citing Pillsbury's contractual right of first refusal to any sale. Eventually Chart House compromised, agreeing to give up its Boston holdings in exchange for the right to keep its Houston properties.

New Leadership: 1977-80 Pillsbury's suit was proof of a new management attitude that involved more central control over powerful franchisees. However, it wasn't until Pillsbury brought in a hard-hitting executive from McDonald's that Burger King began to exert real control over its franchisees. Donald Smith was third in line for the top spot at McDonald's when Pillsbury lured him away in 1977 with a promise of full autonomy in the top position at Burger King. Smith used it to "McDonaldize" the company, a process that was especially felt among the franchise holders. While Burger King had grown by selling wide territorial rights, McDonald's had taken a different approach from the very beginning, leasing stores to franchisees and demanding a high degree of uniformity in return. When Smith came on board at Burger King in 1977, the company owned only 34 percent of the land and buildings in which its products were sold. Land ownership is advantageous because land is an appreciating asset and a source of tax deductions, but more importantly it gives the parent company a landlord's power over recalcitrant franchisees. Smith began by introducing a more demanding franchise contract. Awarded only to individuals, not partnerships or companies, it stipulated that franchisees may not own other restaurants and must live within an hour's drive of their franchise, effectively stopping franchisees from getting too big. He also created ten regional offices to manage franchises. Smith's new franchise regulations were soon put to the test. Barry W. Florescue, chairman of Horn & Hardart, the creator of New York City's famous Automat restaurants, had recognized that nostalgia alone couldn't keep the original fast-food outlets alive and had decided to turn them into Burger Kings. Smith limited Florescue to building four new stores a year in New York and insisted that he could not expand elsewhere. When Florescue bought eight units in California anyway, Smith sued successfully. Florescue then signed with Arby's, and Smith again effectively asserted Burger King's control in court, based on the franchise contract. His strong response to the upstart franchisee kept Horn & Hardart from becoming too strong a force within Burger King. Increasing control over franchisees was not the only change Pillsbury instituted at Burger King during the 1970s. Like many other chains, Burger King began to expand abroad early in the decade. Fast food and franchising were unfamiliar outside the United States, making international expansion a challenge. Burger King's international operations never became as profitable as anticipated, but within a decade the company was represented in 30 foreign countries. At home the company focused on attracting new customers. In 1974 management required franchisees to use the "hospitality system," or multiple lines, to speed up service. In 1975 Burger King reintroduced drive-through windows. While original stands had offered this convenience, it had gradually been eliminated as Burger King restaurants added dining rooms. Drive-throughs proved to be a profitable element, accounting for 60 percent of fast food sales throughout the industry by 1987.

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Smith also revamped the corporate structure, replacing eight of ten managers with McDonald's people. To attack Burger King's inconsistency problem, Smith mandated a yearly two-day check of each franchise and frequent unscheduled visits. He also decided that the company should own its outlets whenever possible, and by 1979 had brought the company's share of outlet ownership from 34 percent to 42 percent. Smith also turned his hand to the food served in his restaurants. He introduced the french fry technique that produced the more popular McDonald's-type fry. In 1978, primarily in response to the appeal that newcomer Wendy's had for adults, he introduced specialty sandwiches--fish, chicken, ham and cheese, and steak--to increase Burger King's dinner trade. Offering the broadest menu in fast food did the trick, boosting traffic 15 percent. A more radical expansion for the Burger King menu came next. After McDonald's proved that breakfast could be a profitable fast-food addition (offering a morning meal spread fixed costs over longer hours of operation) Smith began planning a breakfast menu in 1979. But Burger King had a problem with breakfast: its flame broilers could not be adapted as easily to breakfast entrees as McDonald's grills could. Smith urged development of entrees that could be prepared on existing equipment instead of requiring special grills. He began testing breakfast foods in 1978, but it wasn't until the Croissan'wich in 1983 and French Toast sticks in 1985 that Burger King had winning entries in the increasingly competitive breakfast market. Troubled Times in the 1980s Smith left Burger King in June 1980 to try to introduce the same kind of fast-food management techniques at Pizza Hut. (Ironically, when he left Pizza Hut in 1983 he moved into the chief executive position at the franchisee that had given Burger King so much trouble, Chart House.) By following in Smith's general direction, Burger King reached its number-two position within two years of his departure, but frequent changes at the top for the next several years meant inconsistent management for the company. Louis P. Neeb succeeded Smith, to be followed less than two years later by Jerry Ruenheck. Ruenheck resigned to become a Burger King franchise owner in Florida less than two years after that, and his successor, Jay Darling, resigned a little over a year later to take on a Burger King franchise himself. Charles Olcott, a conservative former chief financial officer, took over in 1987. Burger King did not stand still under its succession of heads, though. The company continued to expand abroad, opening a training center in London to serve its European franchisees and employees in 1985. Besides developing successful breakfast entries, Burger King added salad bars and a "light" menu to meet the demand for foods with a healthier, less fatty image. In 1985 the firm began a $100 million program to remodel most of its restaurants to include more natural materials, such as wood and plants, and less plastic. Burger King also completely computerized

its cooking and cash register operations so even the least skilled teenager could do the job. Average sales per restaurant reached the $1 million mark in 1985. Even some of Burger King's post-Smith successes caused problems, though. The company introduced another successful new entree, Chicken Tenders, in 1986, only to find it that it could not obtain enough chicken to meet demand. Burger King was forced to pull its $30 million introductory ad campaign. Burger King was still bedeviled by the old complaint that its service and food were inconsistent. The company played out its identity crisis in public, changing ad styles with almost the same frequency that it changed managers. After Smith's departure in 1980, Burger King's old "Have it your way" campaign ("Hold the pickles, hold the lettuce. Special orders don't upset us.") was no longer appropriate. That ad campaign emphasized as a selling point what many saw as a drawback at Burger King: longer waiting times. However, under Smith's emphasis on speed and efficiency, special orders did upset store owners. So the company turned to the harder sell "Aren't you hungry for Burger King now?" campaign. The hard sell approach moved the chain into second place, and Burger King took an even more aggressive advertising line. In 1982 Burger King directly attacked its competitors, alleging that Burger King's grilled burgers were better than McDonald's and Wendy's fried burgers. Both competitors sued over the ads, and Wendy's challenged Burger King to a taste test (a challenge that was pointedly ignored). In return for dropping the suits, Burger King agreed to phase out the offending ads gradually, but Burger King came out the winner in its $25 million "Battle of the Burgers": the average volume of its 3,500 stores rose from $750,000 to $840,000 in 1982, sales were up 19 percent, and pretax profits rose 9 percent. Burger King's subsequent ad campaigns were not as successful. In 1985 the company added just over half an ounce of meat to its Whopper, making the 4.2 ounce sandwich slightly larger than the quarter-pound burgers of its competitors. The meatier Whopper and the $30 million ad campaign using celebrities to promote it failed to bring in new business. All three of the major campaigns that followed ("Herb the Nerd," "This is a Burger King town," and "Fast food for fast times") were costly flops. "We do it like you'd do it" followed in 1988, with little more success. In 1988, the company faced another kind of threat. Parent Pillsbury, the target of a hostile takeover attempt by the British company Grand Metropolitan plc, devised a counterplan that included spinning off the troubled Burger King chain to shareholders, but at the cost of new debt that would lower the price of both Pillsbury and the new Burger King shares. Such a plan would have made it highly unlikely that Burger King could ever have overcome its ongoing problems of quality and consistent marketing. Pillsbury's plan didn't work, and Grand Met bought Pillsbury in January 1989 for $66 a share, or approximately $5.7 billion. Pillsbury became part of Grand Met's worldwide system of food and retailing businesses with well-known brand names. In Burger King, Grand Met got a company with some problems but whose 5,500 restaurants in all 50 states and 30 foreign countries gave it a strong presence. Turnaround under Grand Met in the 1990s

Grand Met's first move was to place Barry Gibbons, a successful manager of pubs and restaurants in the United Kingdom, into the CEO slot. Soon thereafter, in September 1989, Grand Met acquired several restaurant properties from United Biscuits (Holdings) plc, including the Wimpey hamburger chain, which included 381 U.K. outlets and 148 in other countries. By the summer of 1990, 200 Wimpeys had been converted to Burger Kings, bolstering the company's foreign operations, a traditional area of weakness. Over the next several years, Burger King was much more aggressive with its international expansion, with restaurants opening for the first time in Hungary and Mexico (1991); Poland (1992); Saudi Arabia (1993); Israel, Oman, the Dominican Republic, El Salvador, Peru, and New Zealand (1994); and Paraguay (1995). By 1996, Burger King had outlets in 56 countries, a dramatic increase from the 30 of just seven years earlier. While Gibbons was successful in accelerating the company's international growth, overall his tenure as CEO (which lasted until 1993) brought a mixture of successes and failures. In the new product area, the hamburger chain hit it big with the 1990 introduction of the BK Broiler, a broiled chicken sandwich aimed at fast-food eaters seeking a somewhat more healthful meal; soon after introduction, more than one million were being sold each day. Also successful were promotions aimed at children. In 1990 the Burger King Kids Club program was launched nationwide, and more than one million kids signed up in the first two months. The program continued to grow thereafter; by 1996 membership stood at five million and the number of Kids Club meals sold each month had increased from 6.1 million in 1990 to nearly 12 million. Also hugely successful was the long-term deal with Disney for motion picture tie-ins signed in 1992. Through 1996 (when Disney broke with Burger King to sign a deal with arch-rival McDonald's), the partnership had involved such Disney smashes as Beauty and the Beast, The Lion King, and Toy Story. In 1996 Burger King signed a new Hollywood deal with DreamWorks SKG. Gibbons also worked to improve Burger King's profitability, under a mandate from Grand Met. Soon after taking over as CEO, Gibbons cut more than 500 jobs, mainly field staff positions. He also began to divest company-owned stores in areas where the company did not have critical mass, particularly west of the Mississippi. Doing so helped increase profitability, although some observers charged that Gibbons was selling off valuable assets just to improve the company numbers. In any case, during Gibbons's last two years as CEO, profits were about $250 million each year, compared to at most $175 million a year under Pillsbury. Where Gibbons certainly failed, however, was in addressing Burger King's longstanding problem with image. The advertising program was still in disarray as the firm hired in 1989, D'Arcy Masius Benton & Bowles, created still more short-lived campaigns: "Sometimes you've gotta break the rules" (1989-91), "Your way right away" (1991), and "BK Tee Vee" (1992-93). Neither franchisees nor customers were endeared to any of these. In the face of the improving profitability of the corporation, such marketing blunders led to abysmal chainwide sales increases, such as a 3.6 percent increase for fiscal years 1991 and 1992 combined. In mid-1993, James Adamson succeeded Gibbons as CEO, a position for which he had been groomed since joining Burger King as COO in 1991. Adamson, who actively sought out the

advice of company co-founder James W. McLamore, moved to build on Gibbons's successes as well as rectify the failures. Adamson's most important initiatives addressed key areas: quality, value, and image. He improved the quality of products, such as in 1994 when the size of the BK Broiler, the BK Big Fish, and the hamburger were increased by more than 50 percent. He belatedly added a "value menu" after most other fast feeders had already done so, as well as offering special promotions, such as the 99 Whopper. Related to both value and image was the long-awaited successful ad campaign, "Get your burger's worth," created by Ammirati Puris Lintas, and emphasizing a back-to-basics approach and good value. The focus on the basics also led to a simplification of what had become an unwieldy menu--40 items were eliminated. The new focus was on burgers--with an emphasis on flame broiling--fries, and drinks. By early 1995, Adamson's program was paying off as same-store sales increased 6.6 percent for the fiscal year ending March 31, 1995. Morale among the franchisees had improved dramatically as well. Adamson resigned suddenly in early 1995 to head Flagstar Cos. of Spartanburg, South Carolina. In July, Robert C. Lowes, who had been chief officer for Grand Met Foods Europe, was named CEO. Later that same year he became chairman of Burger King and gained a position on the Grand Met executive committee, a move that signaled Grand Met's commitment to Burger King and the strength of the company's resurgence. Lowes soon set some lofty goals for Burger King, including $10 billion in systemwide sales by 1997 (from $8.4 billion in 1995) and 10,000 outlets by the year 2000 (there were 8,455 in mid-1996). Management changes continued however, and in 1997 Dennis Malamatinas, an executive from Grand Met's Asian beverage division, was named CEO. Later that year, Grand Met merged with Guinness, creating Diageo plc. The new company's main focus was on its beverage and spirits business, leaving many analysts speculating that Diageo would eventually sell or spin off Burger King. Despite the changes in ownership and management, Burger King remained dedicated to beating out its main competition, McDonald's. It introduced the new Big King burger to compete with McDonald's Big Mac and also launched a $70 million french fry advertising campaign that included a free fryday give-away at its restaurants. By 1998 both domestic and international sales were increasing, along with market share. Bolstered by its recent success, Burger King launched an aggressive restructuring campaign that included adopting a new logo; store remodeling with cobalt blue, red, and yellow dcor; new packaging; drive-thru lane upgrades; and a new cooking system. The firm also began to turnaround its European operations, exiting the highly competitive French region and focusing on growth in the UK, Germany, and Spain. The company's Latin America, Mexico, and Caribbean operations also experienced modest growth. Problems Lead to a Sale: 1999 and Beyond Burger King's success however, proved to be short-lived. In 1999, the company was forced to recall a promotional toy, the Pokemon ball, after it was discovered to be potentially dangerous for children. A class-action suit followed, claiming the company acted in a negligent fashion when it distributed the toy in its kids' meals. The firm's relationship with its franchisees was also deteriorating, marked by a highly publicized lawsuit with franchisee La Van Hawkins. The Detroit-based entrepreneur claimed Burger King failed to help him develop and purchase

restaurants as promised. The firm counter-sued claiming that Hawkins owed the company $16 million. Civil rights activist Al Sharpton threatened to boycott Burger King as a result. To top it off, sales were falling, and the company experienced yet another change in management. Malamatinas left the firm in 2000, and Colin Storm was named interim CEO. By this time, Burger King's parent company had announced plans to exit the fast food industry. Many franchisees were experiencing financial difficulties--including bankruptcy--and had long since complained that Diageo had neglected Burger King in favor of its premium liquor business. These franchisees adopted an internal program entitled "Project Champion" aimed at forcing a sale of Burger King. They approached J.P. Morgan Chase & Co. to orchestrate the deal, and, eventually, Diageo agreed to sell Burger King. Texas Pacific Group along with Bain Capital and Goldman Sachs Capital Partners purchased the fast food chain for $1.5 billion in late 2002. According to a 2003 Feedstuffs article, Burger King's franchisee association claimed that the new ownership marked "the first day of a new era" for Burger King. CEO John Dasburg--elected in 2001--also felt the acquisition had significant benefits. In the aforementioned article Dasburg remarked that it would "better position Burger King as a healthy, independent company for the first time in more than 30 years." While company management appeared optimistic about its future, Burger King remained embroiled in intense competition. The firm continued to launch new advertising campaigns and in 2002 introduced the BK Veggie, the first fast food veggie burger to be offered in the United States. Also in 2002, Burger King revamped the BK Broiler, making a new product they called the Chicken Whopper. The firm also moved into its new world headquarters in Miami, dedicating the building to founders Edgerton and McLamore. Management focused on capturing a larger portion of the fast food market. However, only time would tell if Burger King's new independence would help realize its goals. Principal Competitors: McDonalds Corporation; Wendy's International Inc.; Yum! Brands Inc.

Chronology

Key Dates: 1954: James McLamore and David Edgerton establish Burger King Corporation. 1957: The Whopper is launched. 1959: The company begins to expand through franchising. 1967: Burger King is sold to Pillsbury. 1977: Donald Smith is hired to restructure the firm's franchise system. 1982: Burger King claims its grilled burgers are better than competitors McDonald's and Wendy's fried burgers. 1989: Grand Metropolitan plc acquires Pillsbury. 1997: The firm launches a $70 million french fry advertising campaign; Grand Metropolitan merges with Guinness to form Diageo plc. 2002: A group of investors led by Texas Pacific Group acquire Burger King.

Additional Details

Private Company Incorporated:1954 Employees:340,000 Sales:$1.7 billion (2002) NAIC:722211 Limited Service Restaurants

Further Reference

Alva, Marilyn, "Can They Save the King?," Restaurant Business, May 1, 1994, p. 104. "Burger King Sale as Much Hot Temper as Cool Cash," Houston Chronicle, December 29, 2002, p. 1. Collins, Glenn, "Grand Met Names a Chief for Burger King Subsidiary: Turnaround Is Seen at Fast Food Chain," New York Times, July 12, 1995, p. C2. DeGeorge, Gail, "Turning Up the Gas at Burger King: It's Discounting Burgers and Dumping Yet Another Ad Campaign," Business Week, November 15, 1993, pp. 62-67. Emerson, Robert L., Fast Food: The Endless Shakeout, New York: Lebhar-Friedman Books, 1979. ------, The New Economics of Fast Food, New York: Van Nostrand Reinhold, 1990. Farrell, Greg, "Burger King: Whopper on the Rebound?," Brandweek, February 7, 1994, p. 22. Gibson, Richard, "Burger King Overhaul Includes Refocus on Whopper," Wall Street Journal, December 15, 1993, p. B4. Harrington, Jeff, "Burger King Executives Struggle to Turn Around Company," St. Petersburg Times, October 16, 2000. Hays, Constance L., "Burger King Campaign Is Promoting New Fries," New York Times, December 11, 1997, p. D12. Howard, Theresa, "BK Looks toward Recovery under New Chief Adamson," Nation's Restaurant News, August 2, 1993, p. 5. Kramer, Louise, "Burger King Gets Back to Basics in Latest Ad Blitz," Nation's Restaurant News, April 29, 1996, p. 14. Luxenberg, Stan, Roadside Empires: How the Chains Franchised America, New York: Viking, 1985. Maremont, Mark, Pete Engardio, and Brian Bremner, "Trying to Get Burger King Out of the Flames: It's a Tall Order, Even for Grand Met Hotshot Gibbons," Business Week, January 30, 1989, p. 29. Pollack, Judann, "Burger King Sizzles in Wake of Arch Deluxe," Advertising Age, June 17, 1996, p. 3. Thomson, Richard, "GrandMet Fails to Stop Rumour Mill Biting Into Burger King," Times, November 10, 1995. Smith, Rod, "Burger King's Sale Readies System for Growth," Feedstuffs, January 6, 2003, p. 7. Walker, Elaine, "Burger King Takes Aim at First Place in Fast-Food Battle," Miami Herald, May 10, 1999