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Burger King Falling Behind

NEW YORK -- With more than one-fifth of franchisees losing money, Burger King is yet again looking for a new CEO to replace Brad Blum, the company's ninth CEO in 15 years, according to the Wall Street Journal. Moreover, "at least three of its 10 largest franchisees have filed for bankruptcy in recent years," and Burger King could soon be displaced as the No. 2 burger chain by Wendy's, reported

The past several years should have been good ones for the flame-broiled burger joint. McDonald's, coping with market saturation, opened a window for Burger King to steal market share. Even without displacing McDonald's as No. 1, Burger King could have been throwing off tons of cash, according to No. 2 players in gigantic consumer markets can be highly profitable, even excellent: Newsweek, Lowe's, Pepsi, Hertz and CBS.

There's even some benefit to being No. 2. Just as Wal-Mart takes all the political heat for low pay in the retail industry, McDonald's is the designated flak-catcher for issues relating to obesity and health. "Supersize Me" filmmaker Morgan Spurlock ate at McDonald's every day, not Burger King.

Burger King's problems have been ownership and management -- not food. For most of its history, Burger King has been a division of a conglomerate, not a freestanding publicly held company. And in the past 15 years, the longest CEO tenure was four years -- hardly enough time to develop a coherent growth strategy, let alone implement one.
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