Burger Fuel cooks up a Dubai deal

They will be eating Burger Fuel burgers in Dubai soon, thanks to Burger Fuel Worldwide[BFW] management signing a Master franchise agreement with Dubai based Al Khayyat Investment Group Investments LLC - a holding group with diverse business interests ranging from multinational companies, automotive, retail, schooling, leasing and real estate interests.




Related links

Al Khayyat Group
NZX Announcement NBR: Burger Fuel signs franchise deal in Dubai YAHOO:Burger Fuel moves to Dubai
Burgerfuel website

It will be interesting to see the terms of the agreement, presumably it will be similar to the individual franchise agreements operated in New Zealand, Burger Fuel's home. If the Arab franchisees plunck their oil money down and really go for it, then possible investors in Burger Fuel here may get a better picture on how successful the Burger Fuel Franchise operator will fare.

Since the listed company will derive its income from ongoing royalties, currently too small to make any profit on overheads, the development of a larger group of stores will be a good indicator of the company and its long term future.

Personally, I'm still a little skeptical as to why Josef Roberts, executive director of Burger Fuel, and his fellow directors may have leaped so far across the world with their concept before developing it more fully and profitably in Australia.

Two company owned stores in Sydney just isn't a good indicator for future success outside the Australasian market.

I have so many questions about this move I have made a request to Josef ,via email , to flesh out some of the detail of today's announcement. I'm curious as to whether the Dubai company made the first move or if it was Burger Fuel's initiative.

I know there is plenty of interest about this company because every bit of news about Burger Fuel is googled incessantly, this site got alot of BF related traffic today, including a handful from Dubai, possibly kiwi ex pats.

Save for more positive concrete numbers or an indicator that things are improving financially and that the Franchisor business model will work with this type of high end food business, I clearly remain negative on the company when it comes to its present valuation of just under NZ $30 million.

Some questions need to be answered to reassure investors that management are heading in the right direction, given today's surprise announcement.

Hopefully, even though I have been critical of his baby, Josef will return my email. He has been great so far.

Burger Fuel shares were untraded at closing today, which isn't unusual. They last traded April 29 @ 45c.


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c Share Investor 2008