Burger King Franchisees Keeping Rebate; Ad Budget May Be Hit

Burger King Holdings Inc. franchisees will get to hold onto their entire soda rebate funds for now, potentially crimping the burger chain’s plan to kick off 2010 with a beefier national ad presence.

Franchisees in the coming weeks will receive the full rebate, earned from buying soda syrup, from Coca-Cola Co.,  and Dr Pepper Snapple Group Inc., as Burger King has deferred diverting up to 20% of those funds to its national advertising pool due to pending litigation, a Burger King spokeswoman said late Thursday. The February payment is one of two franchisees receive annually from the soda companies.

Burger King was eyeing the extra funds to help boost its national advertising presence by as much as 25% in 2010 versus 2009, helping to promote its products, including a showcase of new items cooked on a new broiler, and help close the gap with competitor McDonald’s Corp.

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