Burger King to be Sold; Stock Rises.

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"Few people realize that the top private equity firms, such as Blackstone Group, Carlyle Group, and Kohlberg Kravis Roberts, have become the nation's largest employers through the businesses they own. 

Using leveraged buyouts that load their acquired companies with loans, private equity firms have generated more than $1 trillion in new debt-which will come due just when these businesses are least likely to be able to pay it off.", so begins Josh Kosman's book, "The Buy Out of America."

Kosman's book is an important book for franchisees to read and understand.

For example, today's, September 1st 2010, announcement that Burger King is looking to sell itself caused the stock to rise, is confirmation of Kosman's analysis.

"The Burger King stock was surging by 16.1% to $19.10 in premarket trading Wednesday. The status of the talks is unclear but one interested firm was 3i Group, a British private-equity firm, the Journal says, citing people familiar with the matter."

According to Kosman, we can predict that certain companies will have trouble refinancing their debt.  We obtain that the information in a report by Moody's showing which companies are indebted, by how much, and when the debt is due.

According to that Moody's report, "Burger King Corporation owes US$ 666.2 million in Bank Credit Facility, rated Ba2, and due 06/30/12."

So in less than two years, Burger King is going to have refinance over $650 million of debt - when it's own market share has decreased, and it seems to be a death struggle with its franchisees, NFA, over the ability of the franchisor to dictate money losing value meals to its franchisees.

I recommend that every association leader, executive, board member in the Burger King franchisee association read Kosman's excellent book to prepare for what might happen to the Burger King system. 

We will have more on this story, and hopefully the NFA website will also contain updates for its members.


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Hello, my name is Horst from Frankfurt, I work for a team of Elliott Wave analysts and we all agree that there will be pretty soon a huge movement in the US markets! We prepared with a very strict risk managment now and that should be done by everybody! Regards...

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