Burger King sets sights on mainland
By Yin Ping (China Daily)
Updated: 2005-07-08 06:13

Burger King, one of the three biggest fast food restaurant chains in the US, has picked Shanghai as its entry point to the mainland market - 15 years after its rivals McDonald's and KFC.

The company's first outlet in China, quite small in size compared to a typical McDonald's or KFC restaurant, is located in the city's Jing'an District and opened on June 27.

Burger King's chairman and CEO Greg Brenneman said that before choosing the site, the company spent one year studying mainland consumer culture and preferences.

He said Burger King plans to open 10 outlets within the next 12 months in the east China region.

"We will try to build a reputation in the market and win over local customers as soon as we can," he said.

This is different from Burger King's global approach, in which 90 per cent of its restaurants are franchised.

On February 1, the Ministry of Commerce brought in a new regulation on business franchising. It requires foreign franchisers to operate company-owned shops for at least one year before being granted a franchise.

Brenneman said Burger King will consider franchising soon after its first year on the mainland, in order to increase brand recognition.

"After we begin making a profit in Shanghai, we will expand to neighbouring cities, mainly Hangzhou and Nanjing, by franchising. Then we will move to Beijing," said Steve Desutter, president of Burger King Asia Pacific.

He said the company founded a training centre last month, which trains not only staff but also potential franchisees on outlet management, corporate culture and service philosophy.

"We require interested franchisees to receive at least six months training and we follow a strict screening process," said Desutter.

Insiders say Burger King has a lot of work to do in the years ahead if it is to catch up with McDonald's and KFC.

KFC, the foreign firm with the largest number of fast-food outlets on the mainland, said the presence of Burger King would not affect its expansion.

Shanghai Jinjiang Hotel Co Ltd recently decided to join hands with KFC's parent company Yum! Brands (China) Inc to pump more money into KFC Shanghai, to raise its total investment to US$69 million double the current figure to open more restaurants.

McDonald's said it was happy to see Burger King's entry to the mainland, as it gives Chinese customers another alternative.

But it declined to say how many new restaurants it would open this year.

Founded in 1954, Burger King has 11,000 outlets in 65 countries and regions. Its global revenue last year stood at US$11.3 billion.

It already has outlets in Hong Kong and Taiwan.

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