Burger King to Expand in Europe through Joint Venture

Zacks

Burger King Worldwide, Inc. (BKW) is looking to expand its footprint in Europe. The company recently established a joint venture (JV) — Burger King SEE S.A. — to increase its presence in Italy, Poland, Greece and Romania.

While Burger King already operates in Italy, Poland, and Romania, Greece will be a new market for it. Burger King SEE S.A. has inked a long-term master franchise and exclusive development deal, which includes sub-franchise rights for all these regions. The JV aims to aggressively expand in regions across Southern and Eastern Europe, over the first five to seven years.

With this planned expansion, the company is looking to tap in on the demand that fast food enjoys in Europe. U.S.-based fast food companies have an edge over other dining options, primarily because of their brand value and innovative menu options.

In fact, Burger King has been looking to expand its footprints to reduce dependence on its domestic market. The company is set to complete its long awaited Tim Hortons Inc. (THI) merger. In fact, recently, the Canadian government granted approval to the company for the deal. This deal will lead to the creation of the world’s third-largest fast food company with a market value of roughly $18 billion. Burger King is the second-largest fast food hamburger chain in the world, while Tim Hortons is the largest coffee and doughnuts seller in Canada. The combined business would generate about $22 billion in sales and operate more than 18,000 restaurants in 100 countries.

Burger King currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Ruby Tuesday, Inc. (RT) and DineEquity, Inc. (DIN). Both the stocks sport a Zacks Rank #1 (Strong Buy).

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