Burger King aims at “upscale” makeover

As part of a plan to be revealed Wednesday in Amsterdam, the company will announce a massive effort to overhaul its 12,000 locations worldwide. The sleek interior will include rotating red flame chandeliers, brilliant TV-screen menus and industrial-inspired corrugated metal and brick walls.

“I’d call it more contemporary, edgy, futuristic,” Chairman and CEO John Chidsey said. “It feels so much more like an upscale restaurant.”

But that comes with an upscale price: The new look is expected to cost franchisees, who operate 90 percent of Burger King’s locations, between $300,000 to $600,000 per restaurant.

The company said the new design, called “20/20″ at the Miami-based chain, is already in place at about 60 locations around the world. Burger King expects about 75 more redesigned restaurants to be open by the end of next year. But it will take years before all its locations are transformed.

Burger King franchise owners are contractually required to update their restaurants after a set period of time, and executives said the redesign will be the primary option for future upgrades. All new restaurants will be built using the plan.

So far, remodeled restaurants have seen sales climb about 12 to 15 percent, while restaurants that are torn down and completely rebuilt at the same location have seen sales climb by as much as 30 percent, Chidsey said.

Observers say the hip, urban and masculine elements in the redesign may be a hit with Burger King’s most loyal customers – young men who frequent the chain known as much for its signature Whoppers and “steak burgers” as its sometimes-creepy “King” commercials. But some experts are skeptical about whether sales will grow as much as the company claims and how eager franchise owners will be to part with that kind of cash, particularly in a sour economy.

Chidsey said he thinks most franchise owners, who typically own both their restaurant’s building and the land, won’t have trouble obtaining financing and will be swayed once they see how sales can climb.

Morningstar analyst R.J. Hottovy said the reformulated restaurant could keep diners at the table longer but may not draw in enough extra diners to justify the cost.

“I don’t think they’ll change their perception,” he said. “They’re pretty entrenched in their reality.”