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Burger King awarded military base contract

By SUSAN POSTLEWAITE, UPI Business Writer

MIAMI -- Burger King was awarded a lucrative contract to serve Whoppers and pita salad sandwiches to U.S. troops at 185 military base restaurants in the United States and abroad, officials said Wednesday.

The five-year contract was awarded to the nation's No. 2 hamburger chain May 15 by the Army and Air Force Exchange Services, AAFES, but was not disclosed until Wednesday.

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'It's the largest single deal we've ever done,' said Steve Finn, vice president of public relations for Miami-based Burger King.

'I don't think you can overestimate the value of this thing. It's pretty impressive to be able to say the United States military is going to be fed exclusively by Burger King,' Finn said.

'It takes us leaps and bounds ahead in the area of institutional franchising.'

Burger King, which has been opening restaurants at the rate of about 300 per year, said the first five military base restaurants will be opened in West Germany this fall. Others will open in the next year at military bases in Georgia, Louisiana, California and Maryland.

The contract calls for 24 to open the first year and up to 185 by 1989.

Burger King officials said they could not estimate the value of the contract, but it would be worth in the millions.

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Finn said Burger King defeated McDonald's, Hardee's, Wendy's and others in the competitive bid process.

Timothy E. Johnson, director of institutional development for Burger King, said sales per military base restaurant are expected to exceed the average $1 million in sales per domestic restaurant. Burger King will receive royalties and fees of 4 percent of sales, meaning Burger King would pocket $40,000 for each $1 million in sales, he said.

'The military is one of the best markets to be in because it is a captive market,' said Finn. 'We've just locked it up.'

Burger King entered the military base market in October 1982 when it took over the snack bar at the Navy base at Pearl Harbor. It also operates a Burger King at the Governor's Island Coast Guard base in New York. The Pearl Harbor restaurant is expected to reach $2 million in sales for the year ending in October, said Johnson.

McDonald's operates a fast food restaurant at Camp Pendleton.

The contract does not cover Navy or Marine bases.

Maj. Gen. Richard D. Murray, commander of AAFES, said, 'We see this agreement as an example of how the military and private business can work together to the advantage of our service personnel.'

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Earnings from operation of the restaurants will go into Army and Air Force morale and welfare programs, which provide recreational and social service activities to military personnel and their families, he said.

The Burger King restaurants will offer a full range of menu, including salads and pies. The contract gives the military the right to serve beer and wine at certain restaurants.

As of Wednesday, Burger King had 3,796 restaurants worldwide.

Burger King has been moving into the institutional market in the last couple of years. It has contracts for restaurants on the Pennsylvania Turnpike and with Woolworth's. It also is on some college campuses and is building a Burger King at a hotel on the Strip in Las Vegas.

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