Burger King's proposed merger with Canadian coffee chain Tim Hortons puts the company in a position to become the third largest quick service restaurant and expand its tentacles outside the U.S. However, it also comes with major risks for both the brands and their customers.
The track record for quick service restaurant mergers is not good. In fact, it's downright awful. Almost all fast causal restaurant mergers have been disasters. The one that stands out in recent memory is the Wendy's and Arby's merger back in 2008. Time was not on the side of either company as it coincided with the recession and eventually led Wendy's to dump Arby's a few years later. Since then, Wendy's has struggled to define itself against stiff competition.
The problem is that fast-food companies long to balance their portfolios and create efficiencies across brands, but all of it ends up as a distraction from the single most important thing — the customers. Customers don't care about mergers and how big the company becomes; they just want a good meal at a clean, well-lit space. Losing sight of the customers is a real risk and Burger King has to be aware of how the joining of two iconic brands could potentially disenfranchise their base.
To prevent a disaster, Burger King needs to ensure that any changes to the restaurants won't happen for at least one year. In the end, people will buy the experience only if they perceive it as one they can count on. Any movements in staff, locations and food need to be kept to the minimum to ease customers into any big movement happening in the future. Burger King knows this better than any company. It once ran a famous campaign called "Whopper Freakout," in which horrified customers were errantly informed that Burger King had discontinued the beloved burger. The campaign showed Burger King how important the Whopper was to its customers and helped renew interest in the burger.
Burger King should also not force its brand or the Tim Hortons brand on customers. It might be tempting for Burger King to put a restaurant everywhere there is a Tim Hortons, but it isn't necessarily a good move for business. Wendy's actually tried to do the same thing with Tim Hortons back in 1995 and failed. The end result was the severing of a 10-year relationship between Tim Hortons and Wendy's in the mid-2000s.
There has been a lot of buzz about the potential for Burger King, an iconic American brand, to move to it headquarters to Canada. If BK does that, it should own the decision and make a clear difference between the business move and its brand. In order to stop any customers from fleeing, it has to remain true to its American roots. Burger King would need to be truthful and tell the public that it was moving for tax purposes or whatever the reason may be.
The people who are going to be outraged about the border jump are not going to matter because they probably didn't even eat at Burger King in the first place. Burger King needs to weather the storm and focus on maintaining the product and experience.
After all, how many people are still outraged about Budweiser being owned by a bunch of Belgians?
If Burger King can do this right, it stands to expand its global presence and introduce its restaurants to a whole new audience. It may also snag a piece of the breakfast menu pie that quick service restaurants are currently vying for.
Commentary by Leeann Leahy, president at The VIA Agency, a full-service advertising and marketing agency located in Portland, Maine. Follow the company on Twitter @theVIAagency.