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Burger King Names Ninth CEO in 15 Years

By Reuters
Published | Updated

CHICAGO – Burger King Corp., the No. 2 U.S. hamburger chain, Tuesday named turnaround specialist Greg Brenneman (search) as chief executive, replacing Brad Blum, who left earlier this month because of strategic differences with the company's directors.

Brenneman, 42, is currently chairman and CEO of private equity firm TurnWorks Inc. (search) and is the former chief financial officer of Continental Airlines (CAL).

He assumes his new post on Aug. 1, becoming Burger King's (search) ninth CEO in 15 years. Analysts said Brenneman needs to move swiftly to win support from Burger King's operator base, which has seen three of its 10 biggest franchisees file for bankruptcy protection in recent years due to heavy debt and overexpansion.

"He needs to not only turn around the financial operations, but also has to gain the trust of the franchisees, which is the ongoing struggle," said Harris Nesbitt analyst Matthew DiFrisco.

DiFrisco said he does not expect to see growth from Burger King in the next six to 12 months, as the new CEO assesses the situation. There may even be a string of store closings and other strategic moves to stem weakness, he said.

Burger King, which has about 7,700 restaurants in the United States, most of which are franchised, is owned by a private equity group consisting of Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners. The company trails larger rival McDonald's Corp. (MCD), which has about 13,000 U.S. stores.

Shortly after Blum's arrival, he repositioned Burger King's flame-broiled hamburgers as "fire-grilled" to keep pace with health-oriented marketing by rivals such as McDonald's and Wendy's International Inc. (WEN), which could overtake Burger King in the No. 2 spot.

Burger King posted its biggest same-store sales gain in four and half years in May.

Earlier this year, Burger King hired ad agency Crispin Porter + Bogusky, which is known for its quirky campaigns, after dumping WPP Group Plc's Young & Rubicam -- a move that has been well-received by both consumers and advertising experts.