Play station New Burger king prototype provides a glimpse of changes chain may 
                 (Fort Worth Star-Telegram; 04/15/99)                 

   RENO, Nev. - A 21st-century Burger King is opening in Reno tomorrow.

   It embodies the most sweeping changes in the chain's 45-year history, from 
how a Burger King looks and cooks to how it hooks children. The overhaul was so 
extensive that an existing Burger King was razed to construct the prototype.

   "This is the most sweeping change in our history," Dennis Malamatinas, chief 
executive of the Miami-based Burger King, said yesterday. "It's taking place at 
a time when the chain is doing extremely well. What we're trying to do is 
further accelerate our rate of growth."

   Dumping the dated tan-and-brick color scheme, the designers highlighted the 
new restaurant in cobalt blue. The exterior is brighter, with yellow and red 
stripes. Inside, walls are mustard-yellow, countertops are gray and waste 
containers are tomato-red. Even the Burger King-in-a-bun logo has been updated, 
with tilted letters to give it more zing. Much of the kitchen is open for 
viewing so those waiting in line can see flames flickering in the broiler, 
emphasizing a key Burger King attribute.

   A "virtual fun center" is designed for one important customer group - 
children. In addition to the usual playground equipment, the restaurant 
features electronic kiosks loaded with interactive games. The machines have 
video-conferencing capability, so kids at one restaurant can eventually chat 
with those at a similarly equipped Burger King miles away.

   Management predicts that the prototype could eventually boost average unit 
sales to $1.6 million annually from $1.15 million currently. That would surpass 
the $1.5 million average tally of a McDonald's Corp. restaurant in the United 

   Yet the transformation is expensive - at least $15,000 more than the current 
cost of building a Burger King - so skepticism is detectable among franchisees 
gathered in Reno for the chain's annual convention.

   "We need to see what the return is," said Don White, whose store was torn 
down to make room for the prototype. "But if we get the kind we think we're 
going to get, we're going to be warming up the bulldozers."

   In the first real test of the upgrade, Burger King will begin converting 40 
company-owned restaurants in Orlando, Fla. A full rollout across Burger King's 
chain may take two to three years.

   The prototype doesn't have new menu items, but its new cooking system could 
facilitate some. Until now, Burger King has been able to cook at only one 
speed. But the new system features three computer-controlled broiler chambers 
that can heat more slowly, allowing for thicker patties like a planned half-
pound burger, tentatively called the Great American.

   The restaurant-upgrade program may further a run that Burger King, a unit of 
Britain's Diageo PLC, has had much of this decade. Since 1993, its share of the 
U.S. quick-serve hamburger market has grown to 21.9 percent from 17.2 percent, 
the company said. It has about 7,800 restaurants in the United States. Market 
leader McDonald's has nearly 13,000 U.S. restaurants and about 44 percent of 
the market.

   Despite the progress, some Burger King franchisees say a dramatic overhaul 
was needed.

   "Some stores are 40 years old and have been modified to the `nth,' " said 
Steven Lewis, a longtime Blue Bell, Pa., franchisee and president of the 
chain's franchisee association.

   Faced with selling these and other changes to franchisees at this week's 
convention, the company plans to drive home the point that Diageo - primarily a 
food and liquor concern that has long been rumored to be disillusioned with 
fast food - is more committed to Burger King than ever.

   A recent McKinsey & Co. study commissioned by Diageo revealed "tremendous 
upside potential in the brand," Malamatinas said. And after years of losses, 
Burger King's European operations recently started making money. Now "Diageo's 
pretty excited," said Burger King CEO Malamatinas, who also sits on the board 
of the parent company.

   Indeed, management will announce that Burger King is quadrupling its company-
owned restaurants to 2,000 from 500, buying some from franchisees and building 
the rest. And to help franchisees pay for their own upgrades, Burger King is 
considering offering a combination of "investments and incentives," Malamatinas 

   Some options from the prototype focus on the drive-through customer, who 
accounts for about half of sales. Mobile patrons can see electronic screens 
that show them exactly what they've ordered and how much it will cost. There is 
also a speaker beyond the food-delivery window to report any problems. To help 
quickly check orders, the new restaurant places takeout items in transparent 

   The drive-through counter also has its own kitchen to speed up service.

   "We'll get the food to the window before the car" arrives, said Tulin Tuzel, 
Burger King's research-and-development chief.

Thanks Kinetic!

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