Burger King: Beefing Up In Colombia

Courtesy of The Financial Times, a report on Burger King’s plans to expand in Colombia:

Just months after it announced an ambitious plan to take on arch-rival McDonald’s in China, Burger King is back with another expansion plan.

This time, the company is teaming up with Promotora, a Colombian private equity fund, to beef up its presence in the Andean country. Burger King, which currently operates 20 restaurants there, is aiming to open 80 new restaurants over the next five years.

“This is an agreement of exclusive development,” Francisco Mira, the fund’s chief told beyondbrics.

Promotora will acquire a majority stake in Kinco – the franchise company already in charge of Burger King’s restaurants in the cities of Medellín, Cali and Barranquilla.

Colombia is becoming an attractive target for fast-food chains. Shopping centres are mushrooming across the country and an emerging middle class, armed with better access to consumer credits, have been flexing their spending power – boosting sales for everything from cars to burgers.

“Colombia’s economy is thriving and we believe this is a valuable market in our strategic mission to expand our footprint in the Latin America and Caribbean region,” José Tomás, Burger King’s president for Latin America and the Caribbean, told the Miami Herald.

Burger King’s Colombia move figures as part of the company’s plans to expand in emerging markets and offset its sluggish performance in the over-saturated and highly competitive US market.

The company, which was taken private 3G Capital, a Brazilian-backed private equity group in a $3.25bn deal in September 2010, last year announced plans to to open 900 restaurants in Brazil by 2016.

And earlier this year, it said it would boost its 64 locations to several hundred by 2017 together with a new partner, VTB Capital, Russia’s state-owned investment bank.

Burger King will face plenty of competition in Colombia. Aside from McDonald’s, there are a number of well-established local chains such as La Hamburguesería, and the highly-popular El Corral – worth about $300m with more than 170 restaurants all over Colombia (and some other ventures across the Andes and Panama).

Burger King has its work cut out if it wants to sell more Whoppers.

This entry was posted on Wednesday, October 24th, 2012 at 4:53 pm and is filed under Colombia.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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