The King is Dead…

Okay, not really, but according to a story that ran today on CNN Money, Burger King is no longer the number two hamburger/fast food chain; Wendy’s has finally overtaken them. The numbers themselves shouldn’t worry any of the Burger King stockholders just yet – the company trails Wendy’s by $8.4 billion to $8.5 billion – which may be roughly $100 million in absolute terms, but is only 1.2% in relative terms. What is rather more disturbing (for the Burger King stockholders, at least) is that Wendy’s is getting this higher performance while operating 18% fewer restaurants – 5,900 units compared with Burger King’s 7,200. If I were one of the stockholders I’d definitely want to know why my company was making less money despite having 1,300 more outlets. But then, I’d also want to know who authorized some of the dumber marketing programs at Burger King – and why those individuals haven’t been fired yet…

We’ve spoken in this space about the “Freaky King” ads (television spots featuring a character with an oversize, strange-looking plastic head piece), the “Freaky King” pillowcases and tie-in merchandise, the occasionally obscene print ads, and the fact that the complete incompetence exhibited by some of the Burger King crews (including the one closest to our house) don’t appear to be helping the public perception of Burger King offering an inferior product. From a business standpoint, the most absurd factor of all has to be the outrageous treatment of the franchise holders by the parent company, considering that the success of those franchised locations – and the quality of their products and operations – is critical to the company’s overall success. Until now, however, it was only unfounded speculation on my part that all of this exceptional idiocy was going to bring down the company…

Now, I don’t mean to suggest that the decline of Burger King (and the rise of its competition) is due entirely to management shortcomings. The increasing influence of burger competitors, such as the Jimmy John’s sandwich chain, the upscale Chipotle and Qdoba Mexican-themed fast-food restaurants, and the unholy trinity of Taco Bell, KFC and Pizza Hut have all taken their toll on the hamburger sub-industry, and new entrants such as Five Guys have fragmented the market even further. And there’s no question that high fuel costs, increasing demands for food purity and ecologically responsible farming, and the general decline of the economy have all contributed to the company’s problems over the past few years. But all of these factors make it more important for Burger King to work with their franchise holders, build good relationships with their customers, and avoid advertising campaigns that offend (or creep out) huge sections of their potential customer base, rather than less – and the company does not seem to have grasped this fact…

The fact is, at the end of the day, no one is going to bail out a failing fast-food corporation. If Burger King continues to strong-arm franchise holders into selling double cheeseburgers for below cost, running “Freaky King” spots after the franchise holders (and the public) have begged them not to, and otherwise alienating the people they need to stay in business, they’re likely to vanish off of the American scene as if they were never here, and no one will notice because regional players like Jack-in-the-Box and Carl’s Jr. will take over their share of market, and we’ll all get to eat Jumbo Jacks, Ultimate Cheeseburgers, and Western Bacon Cheeseburgers instead…

You know what, forget I said anything…