MIAMI Burger King Corp. said Tuesday it would distribute coupons for a $1 double cheeseburger after franchisees reportedly rejected proposals to feature the sandwich at that price on their menus.
The franchisor also said it would focus marketing efforts on its $1 Whopper Jr. sandwich in August and September. During that time, the chain said it would distribute direct-mail coupon books, which include the $1 double cheeseburger offer, to 80 million U.S. households.
“Burger King Corp. remains fully focused on its value offerings and delivering value for the money to its guests,” the company said in a statement.
Burger King franchisees last week rejected a plan by the franchisor to sell the double cheeseburger for $1 for four months and a later proposal for a six-week promotion, according to Dow Jones reports. The reports cited franchisees who voiced concerns that a $1 double cheeseburger would hurt margins and potentially lead customers to trade down from higher-priced products.
Rival McDonald's raised the price of its double cheeseburger from $1 to $1.19 late last year amid rising costs and franchisee complaints that a profit could not be made on the item. The double cheeseburger was replaced on the Dollar Menu with a McDouble sandwich, which contains two patties but only one slice of cheese.
Joe Buckley, an analyst with Bank of America-Merrill Lynch, said in a report Tuesday that franchisee tension, stemming from an ongoing soft drink contract dispute, could be a road block for Burger King as it seeks to add value offerings to drive traffic.
"We are concerned that the lack of alignment between Burger King and its franchisees could complicate efforts to turn sales," Buckley said.
Contact Ron Ruggless at [email protected].