Burger King and its largest Mexican franchisee are forming a joint venture agreement designed to grow the brand’s presence in Mexico over the next several years.
The deal is part of an ongoing efffort by Burger King to expand its operations internationally by entering into strategic agreements with key franchisees. It also meets the goal of reducing the number of restaurants operated by the Miami-based fast-food chain.
Burger King will join forces in Mexico with Alsea, S.A.B. de C.V., already the largest restaurant operator in Latin America of global brands. Alsea operates 1,227 restaurants in Mexico, Argentina, Chile and Columbia under a diverse platorform of brands including Burger King, Domino’s Pizza, Starbucks, Chili’s and California Pizza Kitchen. The company has been a Burger King franchisee for more than 10 years and has 106 restaurants in Mexico.
As part of the deal, Alsea will take over operations of the 97 restaurants in Mexico owned by Burger King, giving the company a total of 203 restaurants. Burger King will retain a minority ownership stake in the joint venture. The deal included a cash payment to Burger King, but terms were not disclosed.
Alsea also gets exclusive development rights in Mexico for 20 years and operating control of the brand throughout Mexico. Alsea will be the master franchisee, responsible for collecting royalties from the other franchisees who operate the remaining 206 restaurants in Mexico.