Burger King said last Thursday that its chief executive Bernardo Hees would step down as CEO this summer to lead H.J. Heinz Company, which is being purchased by Burger King’s parent company, 3G Capital and partner Berkshire Hathaway. Burger King’s chief financial officer Daniel Schwartz will take over as CEO when Hees steps down. Schwartz was also named the company’s chief operating officer, effective Thursday.
Both Hees and Schwartz have been with Burger King since 2010, the same year the company was acquired by 3G Capital. Burger King returned to the New York Stock Exchange in June 2012. The management change caught industry observers by surprise.
"My initial thought when I saw the news was that Burger King has had so many CEOs in the last decade or so," said Fred LeFranc, a founding partner at restaurant consulting firm Results Thru Strategy.
Similarly, Jeffrey A. Bernstein, a senior research analyst at Barclays Capital Inc., wrote in a recent report that he and his colleagues were surprised by the sudden management changes at Burger King, noting that the company went public again only 10 months ago.
In a Thursday preview of its first-quarter earnings, Burger King reported a global same-store sales decline of 1.5 percent. In the U.S. and Canada, that drop is expected to be 3 percent, a decrease the company attributed to a challenging macroeconomic environment and increased competition.
However, LeFranc said Burger King’s sales may have also been soft in recent quarters because the brand has struggled to maintain a solid identity. The chief executive turnover, as well as Burger King’s many switches of corporate ownership, may have contributed to the unclear brand imaging, he noted.
"It’s the fatigue of change," he said. "When you’re busy taking care of problems on the inside, it’s hard to take care of the issues on the outside. Burger King needs to better message not only who they think they are, but also who the guest thinks they are."
Burger King’s messaging simply doesn’t resonate as well as that of other brands, LeFranc added. "Panera Bread is a great example of a brand that not just understands who they are, but also understands the value and how they relate to their guests," he noted. "Chipotle is the same way."
Other personnel changes Burger King released on Thursday include Joshua Kobza's immediate move to the position of chief financial officer. Kobza had most recently served as senior vice president, global finance, and has worked at Burger King since June.
In addition, Steve Wiborg, who was most recently executive vice president and president, North America, is now chairman, North America at the company. Wiborg joined Burger King more than 25 years ago.
Alex Macedo is now executive vice president and president, North America at Burger King, succeeding Wiborg in the role. Macedo joined the company in 2011, and most recently served as senior vice president and general manager, United States.
Burger King executives were not immediately available for comment on the recent changes.
Miami-based Burger King operates or franchises more than 13,000 restaurants worldwide.
