Weaker sales following the recession are prompting many big fast-food chains to adopt leaner business models by unloading company-owned outlets to franchisees.
In the industry, it is known as refranchising, and the strategy is based on the idea that franchisees will tend to run a tighter ship than a company-owned operation.
“The franchisee has more skin in the game,” says William Ackman, a hedge-fund founder who is soon to be one of Burger King’s newest investors through his fund’s interest in Justice Holdings Ltd., a U.K.-listed investment vehicle. “He’s going to put his heart and soul into it.”
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