Why Read?

• Understand Burger King (BK) France’s high IRR on BK franchises with lease management (its focus going forward) and what this means for BK France Potential EBITDA as it scales up its number of BK restaurants
• Understand profitability, payback period and ROI for BK France’s BK franchisees and what these mean for BK France’s ability to attract additional demand for new BK franchises and hence to achieve its Potential EBITDA

What’s New?

• Analysis of BK France BK franchisee financials
• Analysis of BK France IRR on BK franchises with lease management and implications for BK France Potential EBITDA as it expands 
• Financial projections, valuations and sensitivities – base and bear cases

Questions Answered

• What IRR does BK France achieve on its BK franchises with lease management?
• What Potential EBITDA (IAS 17 and IFRS 16) could BK France achieve if it gets close to its original objective of 600 BK stores with most as franchises with lease management?
• What do we see from BK franchisee financials regarding their economics?
• What are BK France’s economics on company-operated (BK and Quick) and on franchised restaurants (BK and Quick; with lease management vs pure franchise)? Fees charged to franchisees vs royalty fees paid by BK France to BK Europe, other expenses incurred by BK France and capex contribution of BK France to franchisees
• What is BK France worth and how well covered are its SSNs and PIK-Toggle (latter issued outside SSNs Restricted Group)?
• How sensitive is our valuation of BK France to number of BK restaurant openings, to YOY LFL growth in average system wide sales per BK restaurant and other factors?
• What are the potential causes for, and likelihood of, BK France’s franchisees becoming distressed?
• What cannibalisation of Average Restaurant Sales (ARS) have BK restaurants seen in terms of the extent of ARS uplift on initial conversion from Quick to BK (where applicable) as the BK estate has expanded?
• How resilient has BK France been through COVID-19 lockdowns and what have been its key mitigating actions / factors?
• How do we expect BK France is performing in the current COVID-19 lockdown?
• What do we expect the c. 100 Quick restaurants (company-operated plus rights with respect to franchised Quick restaurants) to be worth when sold?