CORONA, Calif. - Declining sales have propelled fast-food chains to turn over company-owned units to franchisees in an effort to regain market share, the Wall Street Journal reports. Burger King is the latest chain to sell some of its company-owned locations to franchisees.
Currently, Burger King has about 92% of its units franchised, and wants to have nearly every one of its U.S. locations in the hands of a franchise by early next year. But some franchisees are not buying, at least not now.
Vince Eupierre, who owns 34 Burger Kings in Southern California, is not interested in expanding his empire, not with sales down about 25% from three years ago. "If you ask me, 'Will you buy another store today?€™ I€™d say, let€™s wait a little bit and see what happens in the next 60 to 90 days," he said.
McDonald€™s has dropped the number of company-owned stores to 19%, down from 23%. The move has made the chain more profitable, said Richard Adams, a former McDonald€™s Corp. executive.
For Yum! Brands, "refranchising has been a highly successful strategy for us," said spokeswoman Virginia Ferguson. The parent company of KFC, Taco Bell and Pizza Hut only operations under a fourth of all its restaurants across the world. Yum will lower that number to 5% for Pizza Hut and KFC units by December 31, and 16% for Taco Bell by 2014.