Could not have said it better myself. He's just there to facilitate the transition of Burger King into a brand property play. There is little or no company left to run. The buyout and sale of 1,200 locations was the tough part. A young CEO is perfect for staying out of the way and doing what he's told while they expand royalty payments unsustainably based on the prior trust in the Burger Kind brand in order to pump money out of it until its worthless.
Over time, it'd be very surprising if Burger King's lack of company stores didn't catch up with it. These stores are the best channel for taking the pulse of the market. It's very hard to see a company maintaining its brand and evolving with the market with what basically amounts to a franchise-only play.
It's worth noting that Chipotle, which does not currently franchise, is absolutely killing it from both a financial standpoint[1] and a customer experience standpoint[2]. Burger King's model has an attractive financial profile (for now) but according to the same recent Consumer Reports survey that gave Chipotle top marks in its category, Burger King received one of the worst marks for burgers.
More interestingly, based on a quick glance at the Consumer Reports rankings, it appears there may be a correlation between customer perception of product quality and the percentage of company stores. In Burger King's category (burgers), the number two chain, In-N-Out, doesn't franchise, and the number one chain, The Habit, just started franchising last year and is still relatively small. Food for thought, no pun intended.
[1] http://www.equities.com/editors-desk/stocks/consumer-discret...
[2] http://news.investors.com/business/070214-707190-mcdonalds-y...
But 3G doesn't need to maintain the brand. The Burger King brand, both to the customer and the franchisee is still decent based upon its historical success. It will take quite a few years for that to trickle down to retail investors and potential franchisees. You have contractual 4.5% royalty of gross and 4.5% for advertising of gross. It does not matter if the franchises make any profit. The IPO paid for the original expenditure, so all BK is left with is debt. Debt which has very little teeth because the majority of assets have already been sold off with some more equity about to be drained out during a debt refinancing. Maybe this is just 3G getting in first on the feeding frenzy of the shrinking fast food, burger joint market, and didn't really change Burger King's path too much, but no one should pretend any of this has to do with running a traditional corporation looking out for its own best interest.
You might be right, but I would make the observation that markets seem to be capable of changing a lot faster today. I think anyone investing in consumer segments like retail and fast food should be open to the possibility that meaningful trend shifts can occur and businesses can rise and fall relatively quickly (on the order of a few years as opposed to a decade or more).
If the royalties go higher how easy would it be for the restaurant owner to switch to another fast food type restaurant/franchise. How much could BK (Corporate) block that move?