Burger King Partners Beboca - Analyst Blog

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To further strengthen its global footprint, Burger King Worldwide ( BKW ) recently inked a joint venture deal with Beboca Ltd in Central America. The financial terms of the deal were not disclosed.

Per the deal, Beboca Ltd will act as Burger King's multi-country master franchisee and developer of 178 restaurants in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The joint venture will form a brand-new entity called BK Centro America for this Central American expansion project.

Beboca Ltd shares a long standing relationship with Burger King. It successfully enhanced the brand's presence across Costa Rica and Panama to as many as 48 outlets.

The above mentioned deal affirms management's intent to make Central America one of the prime markets for Burger King's expansion. The burgeoning middle income population in these countries encourages the company to shift its spotlight from the somewhat saturated domestic market, where the burger category is hyper-competitive. Further, the consumers also have inclination towards American food products.

However, the market is not free from competition. Many of its peers Brinker International Inc. ( EAT ) and Denny's Corporation ( DENN ) are focusing on the region.

Burger King has been on an expansion spree for quite some time. Hence, it is emphasizing global expansion in both new and existing markets through development agreements with new and existing franchisees as well as joint venture partners.

In 2012, it has initiated ventures in South Africa, Russia and China while in 2011 the fast-food joint banked on a major investment in Brazil. Burger King currently carries a Zacks #2 Rank (short-term 'Buy' rating).



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BKW , DENN , EAT

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