The battle of the burger chains has left some thinking Burger King is down, and possibly out, for the count. With McDonald’s and Wendy’s enjoying significant success, Burger King is trying to reestablish its brand and expand its reach—as many franchisees appear to be struggling financially. In addition, with a new ownership that’s barely a year old, there is even talk of a possible takeover.
This is quite a load to bear for Mike Deegan, VP Franchising for Burger King and Honeycomb Connect Executive Member, but he seems undaunted, after witnessing both good times and bad since he first started as a Research Intern at the home of the Whopper when he graduated from the University of Miami with a degree in International Finance and Marketing.
“There has been some trepidation out there because there’s work to be done,” says Deegan. “But there have been positive sales results in the last six months, although we’re still cautious.”
Burger King is pinpointing its target market, and is currently trying to hit a bull’s eye with a new, focused marketing approach—to both consumers and potential franchisees. Like most of the restaurant industry, Burger King is addressing health issues—accommodating the low-carb diets and offering more salads, although Deegan admits that “the company makes no pretense that we’re gonna be North America’s health chain”—and is trying to leave behind the price wars. The company is having success with the coveted 16- to 34-year-old target market, with the help of new advertising agency Crispin Porter + Bogusky (who “have already sold out the BMW MINI, convinced teenagers that it's not smart to smoke and made IKEA the place to buy furniture," according to Brad Blum, Chief Executive Officer of Burger King). In fact, the company’s latest innovative Web campaign for Burger King is the talk of the Internet (www.subserviantchicken.com).
While Burger King’s consumer marketing will attempt to focus its efforts towards more specific audiences—like children and ethnic markets—the company’s marketing target is a lot narrower when approaching potential franchisees.
“It’s a very small segment,” says Deegan. “We’re not looking for moms and pops anymore. We’re looking for multi-unit developers with experience. It’s quite a phenomenon; more and more investors are taking a look at franchising. So I’m really playing matchmaker, brokering a lot of deals—for both new and existing units.
“For example, Ameriking, in Chicago, filed for Chapter 11. We decided the model they built was not going to be successful and I found a way to break them up and sell them to nine separate locations and that’s been hugely successful.”
Burger King’s recent troubles have left many people—both in and out of the organization—wondering how many franchises will survive and if there’s a takeover coming down the pipes.
“There clearly is some of that,” he says, answering whether there’s a negative attitude among franchisees. “We have a special franchisee support group for those in financial trouble and we can help them find a buyer. We’ve provided substantial success.
“I don’t think anybody’s really concerned about [a possible takeover],” says Deegan. “There are some rumblings out there…but I don’t think it’s going to happen because they’ve made it through the toughest time. Our new ownership will stimulate a lot of change.”
Deegan is responsible for franchise development, but he came from a marketing and branding background, so he understands the need for Burger King to step things up. In fact, it was the need to break new ground in the late 1980s and early 1990s that brought him back to Burger King, after working as an Account Supervisor on the Coca Cola and McDonald’s accounts for McCann Erickson (and briefly as Director of Field Markets for Popeye’s Chicken prior to that).
“There was a mismanagement of the Burger King brand [before] those years,” says Deegan. “So we pushed the company to grow through the number of franchisees. One of the ways was a deeper foray into non-traditional venues like transportation, universities and colleges, hospitals and military bases. This was untapped by us or by any other fast food chain in 1990. Burger King thought they needed a branding person to develop that area.”
And develop that area he did: with Deegan on board as the Director of National Institutional (Non-Traditional) Accounts, the Burger King Expressway, still popular today, was born.
He understood restaurant design, allowing for success with these (at the time) new, non-traditional venues. Eventually he migrated into real estate, financing and, ultimately, his role as VP Franchising.
Asked about whether he would have liked to continue in into marketing and branding, Deegan said he used to wonder, but he’s avoided the career-view mirror for at least seven years now.
In January 2004, Burger King appointed Lynette McKee to the role of Vice President, U.S. Franchise Development. This has changed Deegan’s role significantly, and could help him grow within the organization.
“I used to spend about 75 percent of my time brokering deals and the rest with marketing and dealing with outside organization. Now my role is 100 percent transactional.”
For Deegan, that will hopefully help his short-term career goal of becoming Chief Development Officer become a reality. And whether that happens or not, he is keen to practice what he’s been preaching.
“My long-term goal is to do something on my own, possibly an equity position as a franchisee with Burger King. It’s just such a great opportunity.”