Burger King CEO leaves in strategy row

Several of Burger King's operators have been on the financial skids, hurt by big debt loads and over expansion.

The Toronto Star
July 3, 2004

Burger King CEO leaves in strategy row
Brad Blum pushed a healthier fast-food menu. Restaurant chain has had 9 CEOs
in last 15 years.

NEW YORK—Burger King Corp., the world's Number 2 hamburger chain, yesterday said its chief executive, Brad Blum, has left the company after 18 months on the job due to strategic differences with the company's board of directors.

The departure of Blum, Burger King's ninth CEO in the last 15 years, was seen by analysts as a blow to a chain that has just recently begun to regain its footing in the competitive U.S. fast-food market.

"It's not a good day for Burger King," Malcolm Knapp, president of restaurant market research firm Malcolm M. Knapp Inc., said.

Privately held Burger King, in a statement, said it hopes to make a decision on Blum's replacement by Aug. 1.

Burger King, which has about 7,700 restaurants in the United States and 357 restaurants in Canada, most of which are franchised, is owned by a private equity group consisting of Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners.

Owen Blicksilver, a spokesman for Texas Pacific, confirmed that some meetings with potential candidates have taken place but he declined to provide further details.

Blum, 50, joined Burger King as chairman and CEO from Red Lobster parent Darden Restaurants Inc., where he was vice chairman. He succeeded former Northwest Airlines Corp. CEO John Dasburg, who came to Burger King in 2001.

During Blum's time, Burger King changed advertising agencies and revamped its menu, causing sales at U.S. restaurants open at least a year, or same-store sales, to post their biggest gain in 4 1/2 years in May.

But despite the chain's progress, trade publication Advertising Age reported last month that Blum was on his way out and that Burger King had interviewed potential candidates for his replacement.

Shortly after Blum's arrival, he repositioned Burger King's flame-broiled hamburgers as "fire-grilled" in an effort to keep pace with health-oriented marketing efforts of rivals such as McDonald's Corp. and Wendy's International Inc.

Earlier this year, Burger King hired ad agency Crispin Porter + Bogusky, which is known for its quirky campaigns, after dumping WPP Group PLC's Young & Rubicam — a move that has been well-received by both consumers and advertising experts.

Several of Burger King's operators have been on the financial skids, hurt by big debt loads and over expansion.

Reuters news agency


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