000816 Franchisees Critical of Burger King’s New PresidentAugust 6, 2000Miami, FL - Burger King Corp.'s announcement that it appointed Mikel Durham as new president for North America drew criticism from the fast food giant's U.S. franchisees, who oppose parent company Diageo's plan to partially float the company's stock. Durham, formerly global strategy director with Burger King's sister company, Guinness, will report to the corporation's acting CEO, Colin Storm, who was previously chief executive at Guinness. “The National Franchisee Association is deeply disappointed that Diageo has again decided to reach into the management ranks of Guinness to fulfil a key leadership position in Burger King,” the association, which represents 80% of 8,000 U.S. Burger King restaurants, said in a statement. “We will also continue our initiatives to facilitate the decoupling of Burger King from Diageo.” The franchisees' statement follows April revelations that the association was trying to wrest Miami-based Burger King, the world's second-largest hamburger brand, from Diageo's control. The association contends Diageo, headquartered in London, does not adequately support the brand, and restricts Burger King's Miami-based management team from making key decisions. Diageo's proposal six weeks ago to spin-off 20% of Burger King Corp. on the New York Stock Exchange was rejected by the U.S. franchisees, who have retained investment advisors to help sell the chain outright. Diageo, an international food and drinks company that also owns Haagen Dazs and Guinness, recently sold its Pillsbury food operations to General Mills for $10.5 billion in stock and cash. The company intends to partially float Burger King stock until 2003, when the remaining 80% would go public. Burger King spokesman Rob Doughty said Durham's appointment had “no relationship” with Burger King's scuffling with Diageo. The position had been vacant since former president Paul Clayton left in January and was overseen by then-CEO Dennis Malamatinas, who recently announced he was taking over the European operations of Priceline.com, Doughty said. Burger King operates over 11,150 franchises in 50 U.S. states in 57 countries and announced 1999 system-wide sales of $10.9 billion. Ninety-two percent of its restaurants worldwide are owned and run by independent franchisees.
E-mail: sflanagan@sprintmail.com |
