Burger King Holdings Inc. plans to raise the price of the $1 double cheeseburger to $1.19 on April 20. It will be replaced with the BK Dollar Double on April 26, minus one slice of cheese.
The $1 double cheeseburger promotion angered the National Franchisee Association who sued Burger King last year. The association said
Burger King had no right to enforce maximum pricing rules.
Analysts estimate the $1.19 double cheeseburger will generate a 52.1 percent profit margin while the new BK Dollar Double selling at $1 will generate an estimated 47 percent profit margin. Both have the same size burger patty but the BK Dollar Double only has one slice of cheese.
According to many franchisees, there is a need for a 65 percent profit margin to make the food item profitable.
According to miamiherald.com
, Tom Forte, restaurant industry analyst with Telsey Advisory Group, said, "For Burger King, it's about finding a combination of new menu items that scream value to the consumer. And for the franchisees it's about having other items that can offset that impact on margins.''
As the Wall Street Journal reports
, Burger King is planning to add a breakfast muffin sandwich and a BK Breakfast Bowl in March. The breakfast bowl will have potatoes, grilled onions and peppers, a scrambled egg and sausage with a cheese sauce. The breakfast sandwich will be egg, sausage and American cheese on an English muffin.