BFG is a multinational fast-food franchisor that sublicenses its Burger Fuel, Shake Out and Winner Winner brands to third party restaurants in New Zealand and the Middle East.
BFG generates most of its operating revenues from franchise fees as well as various product sourcing and marketing services on behalf of its franchisees. BFG owns the Burger Fuel brand that it licenses out under individual franchise agreements to restaurants in New Zealand and under master franchise agreements in parts of the Middle East. It holds franchise agreements with around 55 individual restaurants in New Zealand; Al Khayyat Investments in Dubai; the Bin Hammoodah Group and Al Khayyat Investments joint venture in Abu Dhabi; and the Abdulla Fouad Group in Saudi Arabia. Each of its franchised restaurants offers a range of fast-food burgers, fries, drinks and desserts. BFG generates revenues from one-off and recurring franchise fees that are typically based on a fixed component and a proportion of revenues generated by its franchisees, the provision of training and support services to its franchisees, product sourcing and exporting on behalf of its franchisees as well as various marketing and advertising services.
BFG also owns and operates 3 of its own Burger Fuel restaurants and a satellite kitchen in Auckland that produces and distributes some of its key ingredients to its domestic and international franchisees. In addition, BFG owns the Shake Out and Winner Winner brands that it licenses out under individual franchise agreements to less than 10 restaurants mostly in the North Island of New Zealand.
Quick service restaurants are often characterised as low margin and highly competitive with growing pressure from new entrants and multinational brands, changes in consumer preferences, and the adoption of alternative foods and technologies. Companies try to minimise these risks and increase customer revisitation by promoting new menu items and customer loyalty programs while carefully managing their delivered ingredient costs and inventory levels. Specifically, BFG has indicated its near-term focus is to: develop and expand other fast food brands within New Zealand, including the Winner Winner and Shake Out brands that have been recently acquired and/or launched .
BFG competes directly with other domestic and international fast-food chains, individual restaurants and cafés that are also trying to attract customers through various product offerings, pricing and other customer propositions. Some of its larger competitors are McDonald’s, Burger King, Wendy’s, Kentucky Fried Chicken, Burger Wisconsin and Velvet Burger.
BFG owns an established fast-food brand with strong channels-to-market in New Zealand. It also operates in a number of different countries, giving it the ability to allocate more of its resources to countries with favourable demand drivers and exchange rates, and vice-versa. Going forward it should continue to benefit from increased sales and economies of scale through organic growth, expanding its range of franchised operations and geographic presence, optimising its operations and supply chain as well as undertaking complementary and value-accretive acquisitions. Its downside commercial risks could include: a broader economic slowdown that could affect the propensity of customers to purchase discretionary fast-food meals and therefore the average franchise fees it generates and wholesale ingredients it sells; erosion of market share and gross margins from other domestic and international competitors; loss of a key franchisee, distributor, supplier or employee; changes to the availability, quality and delivered price of wholesale products and third party supplier costs that are unhedged and cannot be passed on to customers through pricing increases; a depreciation of the NZD, which would increase the unhedged cost of its wholesale ingredient imports (equally however, this could increase the unhedged value of any foreign capital it chooses to expatriate back to New Zealand); greater health restrictions and regulations that may increase its compliance costs or prevent it from selling certain products in some markets; restricted growth due to a lack of financing, manufacturing capacity, consumer awareness or attempting to enter multiple markets without gaining traction in any particular market; and any inheritance of undue liabilities or commercial risks through new franchise operations, acquisitions and entrances into new markets.
2007: Burger Fuel was founded by Chris Mason in 1995 as a fast-food burger restaurant in Auckland, New Zealand. It started to franchise out its brand in New Zealand in 1997 and in Australia in 2006. It was first listed on the New Zealand Stock Exchange in 2007 as Burger Fuel Worldwide (BFW.NZ) with plans to franchise out its Burger Fuel brand around the world. At the time, BFW owned and operated 2 restaurants and held franchise agreements with a further 20 restaurants in New Zealand and Australia
2010: BFW experienced ongoing financial difficulties in Australia, which saw it focus more on expanding into the Middle East. It secured master franchise agreements with the Alphamed Group in Dubai (later renamed Al Khayyat Investments) and the Abdulla Fouad Group in Saudi Arabia
2014: BFW secured several new master franchise agreements with the Bin Hammoodah Group and Al Khayyat Investments joint venture in Abu Dhabi, the Abdulla Fouad Group in Bahrain, Wadi Degla in Egypt and an undisclosed consortium in Iraq. It also attempted to enter Qatar, Kuwait and Libya, but withdrew from these regions for social and political reasons. By the end of the year, BFW owned 1 restaurant in New Zealand, held franchise agreements with 34 restaurants in New Zealand and 1 in Australia, and it provided services to a further 19 restaurants in Africa and the Middle East under its master franchise agreements
2015: BFW refocused on the Australia market, increasing its number of franchised restaurants to 7, a number of which were later closed due to their poor performance
2017: BFW entered the United States market, opening its first company-owned restaurant in Indianapolis
2018: BFW sold its single restaurant in the United States to company founder, Chris Mason, who also acquired the master franchise agreement in the United States. BFW closed more Australian restaurants and it also acquired the franchise rights to a New Zealand chicken restaurant brand called Winner Winner with 1 franchisee in Hamilton as it began to narrow its focus on the domestic fast food market
2019: BFW launched a new burger brand, Shake Out, with 1 company-owned store on the North Shore of Auckland. BFW undertook a strategic review and announced that international expansion would no longer be pursued and that it would also consider potential merger, sale or partnership agreements. All of its remaining Australian restaurants were closed and the business was renamed Burger Fuel Group (BFG.NZ)
2020: BFG's domestic focus continued as it opened 5 more stores in New Zealand under the Shake Out and Winner Winner brands, while its sole Iraq store was closed on the back of continued underperformance as well as increasing tension in the region
2021: The global COVID-19 pandemic forced major nations to temporarily close their borders and restrict people’s movements, with BFG closing all of its restaurants for several weeks before re-opening at lower than usual capacities for several months given the enforced social distancing measures. Many of its stores were to never re-open, including its sole store in the United States and some stores in the Middle East
BFG was first listed on the New Zealand Stock Exchange on 27 July 2007. It had 59.6 million shares on issue at the end of the 2018 financial year, 67% of which were owned by Mason Roberts Holdings, 10% by Franchise Brands and the rest by a mix of approximately 2,500 retail and institutional investors.
The BFG Board collectively owned 33.9 million shares at the end of last year. The Board currently comprises:
Josef Roberts has been the Chief Executive Officer and Managing Director of BFG since June 2007. Josef comes from a food and beverage background, having previously been the Chief Executive Officer of Red Bull Australasia.
Unless otherwise stated, all numbers are based on those reported at the end of the prior financial year.
BFG’s historic Annual Reports, Presentations, Prospectuses and Other Announcements can be viewed below or they can be sourced from its website (www.burgerfuel.com) or the New Zealand Stock Exchange (www.nzx.com)
BFW.NZ Annual Report 2020 | BFG.NZ Annual Report 2019 | BFG.NZ Annual Report 2018 | BFG.NZ Annual Report 2017 | BFG.NZ Annual Report 2016 | BFG.NZ Annual Report 2015 | BFG.NZ Annual Report 2014 | BFG.NZ Annual Report 2013 | BFG.NZ Annual Report 2012 | BFG.NZ Annual Report 2011 | BFG.NZ Annual Report 2010 | BFG.NZ Annual Report 2009 | BFG.NZ Annual Report 2008
 Refer to pages 4, 5 and 6 of the BFG Annual Report 2020