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