World Situation Deepens the Challenges Franchisees Face

It is likely not lost on any of us that trying times are here. As BURGER KING® franchisees, we have and continue to face extraordinary challenges in every aspect and dimension of our businesses. Over the last month, the challenges have grown to include those in a far-away place in eastern Europe.

Although it is far too early for us to know the magnitude of the implications of the present world disorder, there is and will be human suffering, economic upheaval and, moreover, an immoral attack on the concept of freedom. These are issues that transcend our capacity as business owners and entrepreneurs, yet challenges such as these always require the best from each of us day in and day out.

One thing that has become of increasing concern is that our country’s energy policies are insufficient.

I have long maintained that a business such as ours is on the leading edge of the economic cycle, and we feel its changes immediately. This has never been truer. With oil prices at record levels, we will once again experience a massive inflationary cycle that unfortunately will likely be here for some time to come.

Oil, as but one element, deeply affects the cost of virtually every single item in our food and supply chain. Our food growers, the farmers of America, will be significantly impacted as they raise the proteins, grains and dairy central to the menu items we ultimately serve our guests. The cost of raising, harvesting, manufacturing, transporting and delivering food and supplies will be substantially affected. There is no doubt that food costs will creep to historically high levels rarely seen and experienced in the recent history of our brand.

Utility costs will be the next battleground of concern. Much like oil, coal- and natural gas-powered utilities will also feel inflationary pressures, which always get passed on to us.

There are two other important constituencies who will also be touched by the pain of inflation. First, of course, are our suppliers. As their costs rise, whether energy-related or not, they will get passed down to our restaurants.

Also, the impact will be felt by our guests, who will be forced to manage their household budgets in a way they have not experienced for some time. In addition to the cost increases they will experience in their wallets, they are now living it firsthand at the gas pump, which is immediately felt in their disposable income. We all recognize that the American public needs to drive their vehicles to work and to transport children, but a trip to our restaurants is far from a necessity. True value for our guests, also known as, “Are we worth it to the guest?” will take on increasing importance.

Providing our guests with the best of the best in our food, service and facilities will become even more important.

As always, when the challenges are significant, the need for leadership increases. Each of us needs to be out front leading our teams to provide not only the direction in the decision-making process but also the inspirational leadership necessary during challenging times like these.

Your National Franchisee Association (NFA) is working diligently where it can at Elevanta, in our various committees, and importantly, politically with our upcoming NFA Day On The Hill. I strongly encourage you to have your voice heard on the Hill later this month.

2022 is an election year and arguably the stakes have never been higher. The experiment of one-party control has failed. What is at stake is a change in the Congress, which will hopefully diminish and mitigate policies that are anathema to small businesses and widespread economic prosperity. It is undoubtedly clear that we cannot prevail in the upcoming election without your voice on the Hill and locally

by DAN FITZPATRICK

with your congressional leaders as well. There certainly is no substitute for your voice with your representatives and senators – make them hear you!

Our PAC needs your financial support as well. Even in these more difficult times, $100 per restaurant is our stated goal. If successful, the BURGER KING® Franchisee PAC would become one of the most identifiable on Capitol Hill and surely will achieve notice.

In summary, you should know that our NFA leadership is working closely with the leadership of Burger King Corp. and RSI on the challenges we face. I know that many of you are intensely focused on your own businesses. I hope for all our sakes that the issues that confront our country and our world will be addressed by political leadership to preserve peace, our way of life and our very country. I know that you join with me in sending our thoughts and prayers to everyone who is in harm’s way. n