Four years after it disappeared from downtowns and shopping malls, the American fast food franchise Burger King may be coming back to Israel.
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Rani Zim and Yair Hasson – one a supermarket entrepreneur and the other a former Burger King Israel franchisee - are in talks, together with other partners, among them the owners of the Frangelico Asian fusion cuisine chain, to buy most of the branches of the local chain, Burger Ranch, and turn them into Burger Kings, sources said on Sunday.
The deal would be a whopper, involving some 50 outlets and a price tag of 50 million shekels ($13 million).
If the transaction goes through, it would spell the end of Burger Ranch, an Israeli institution whose history goes back to 1972. The earlier demise of Burger King in Israel, as well as the fall of other franchises such as Wendy’s, has taught aspiring franchisers that there’s no room in Israel for more than one hamburger empire alongside McDonald’s, which has the biggest share of the Israeli market.
Burger King Worldwide is reportedly interested in returning to Israel and is ready to offer the investors’ group an $18 million loan to help them re-establish the business, a source said.
The investor group believes that the Burger King brand can succeed in Israel, ascribing its 2008 demise in Israel to poor management rather than its lack of popularity with Israelis.
Following the collapse of the Arab League boycott, a wave of imported mostly American franchises opened up in Israel, among them, Burger King in 1993. It was sold a decade later after running up huge debts to the brothers Eli and Yuval Orgad. The Orgads bought Burger Ranch, which was also in financial trouble, in 2008.
Two years later they decided to drop the Burger King name in favor of Burger Ranch, citing market research they said showed that Burger Ranch was more popular.
Burger Ranch denied the reports of a deal. “In recent years, we have received some suggestions, and right now there is nothing concrete,” a spokesperson for the group told the Globes financial daily.