Burger King CEO resigns
(South Florida Sun-Sentinel (KRT) Via Thomson Dialog NewsEdge) Apr. 8--Surprising. Strange. Shocking. Odd. Those were the words industry experts and others used to describe Burger King Corp. Chairman and CEO Greg Brenneman's resignation Friday.
The announcement came just a day after the Miami-based Fortune 500 company reported a 4.9 percent comparable sales increase and as the chain's parent, Burger King Holdings Inc., prepares to go public with a common stock offering in June. Onlookers say Brenneman's exit may cause investors sponsoring the public offering to think twice before taking their money to the bank.
"I would think they're going to study it a little more closely," said Ron Paul, president of Technomic Inc., a Chicago-based research firm that specializes in fast-food retail trends.
John Chidsey, 43, the company's president and chief financial officer, will immediately take over as Burger King's chief executive officer. He's the company's ninth CEO in 11 years.
In addition, Brian Swette, a current independent director, will serve as non-executive chairman, and Senior Vice President and Treasurer Ben Wells will fill Chidsey's spot as CFO.
Brenneman is credited with turning around Burger King and stabilizing the company's upper management. Since he joined the company in August 2004, the nation's No. 2 burger chain announced eight consecutive quarters of positive comparable sales growth, built relationships within the investment community and worked to mend fences with angry franchise owners.
He decided to return to his private equity firm, TurnWorks Inc., to pursue business turnarounds, according to his statement in the company's release. Brenneman remains a significant shareholder in the company.
The company's board issued a statement saying Brenneman "told us when he came that he wanted to transition the leadership of the company to John Chidsey at some point. We are confident that now is the right time to set in motion the next phase of the company's development."
Company spokeswoman Edna Johnson declined to comment further on Friday's announcement, citing Securities and Exchange Commission rules.
But industry experts are scratching their heads at the decision.
"I can't figure it out," said Christopher Muller, professor of hospitality at the University of Central Florida. "This is just a very strange time. They're supposed to be setting the price [for the initial public offering] in June."
Burger King has a reputation for having a "revolving-door problem" with top management, Muller said, noting this announcement could cause investors to view the hamburger chain as unstable and delay the stock offering.
When the company filed to go public in February, it listed the loss of Brenneman, Chidsey and other key officials as a risk to investors.
"I can't imagine anyone would say this is a good thing," Muller said.
Brenneman's departure was a big surprise to Alan Vituli, chief executive of Carrols Corp., a Syracuse, N.Y.-based company and the chain's largest franchisee with about 335 locations.
"There must have been some personality clashes," Vituli said. "There's no question in my mind that this was not a planned change."
Despite the unexpected announcement, Burger King's turnaround and stability are not at risk, he said. "The real soldiers, who created the strategy and implemented the strategy, have been with the company for three years or longer," Vituli said.
Chidsey joined the company in March 2004 as president of the North American division. Several members of the current management team joined the company under Chidsey and former CEO Brad Blum.
"Fortune 500 companies," Muller said, "aren't supposed to act like this."
Jaclyn Giovis can be reached at firstname.lastname@example.org or 954-356-4668.
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