When Burger King
When the company went public in 2006, it was already flaunting the encouraging signs from that region. Burger King was the market leader in 13 of its 26 Latin American markets, in terms of number of restaurants outstanding. Operations in Latin America were consistently showing the highest margins (approximately 26.8%) of BK's segments. In fact, margins were nearly double that from its other geographic segments. The business had also begun expansion into Brazil, where initial indications were promising.
In the four years since, net restaurant count in the region has risen by 41%. Latin American operations still have the best margins, and Brazil has finished 2010 with 93 stores, averaging $1.8 million in annual store sales. To put that in perspective, Chipotle Mexican Grill's
Of course, Burger King will face stiff competition in these emerging economies. McDonald's
Now that private-equity investors have bought out the shares, they're interested in expanding BK's Latin American operations. With its strong position in rapidly growing countries, plus a lucrative franchise model, the company may finally have its investors thinking that it's good to be the King.
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Fool contributor Nick Nejad owns no companies mentioned. Chipotle is a Motley Fool Rule Breakers selection. Chipotle is a Motley Fool Hidden Gems recommendation. Motley Fool Options has recommended a bull call spread position on Yum! Brands. The Fool owns shares of Chipotle and Yum! Brands. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.