Question: Based on the case study Burger King Dollar Double Cheeseburgers. Please point out what you would liked about this analysis and do you agree or disagree with it? In paragraph form. Below is the case study link.

Yes, the Burger King franchises are losing money by selling the burgers for only $1. They are selling them for $1, and lose out on $1.10. The goal of doing this is to get consumers to start going back to places like Burger King; however, inflation is making the prices of everything rise. Consumers are more likely to get the cheaper items on the menu due to this, and the burger will be one of those items. This was also stated by the Deutsche bank analyst; consumers will spend less when going out.

The relevant costs that must be considered are things like the rent, royalties, employee wages, and the materials required to make the double cheeseburgers. They need to consider these things when making the decision to sell the $1 double cheeseburgers, and they need to consider if they can find any cheaper alternatives. For opportunity costs to determine if they should sell the cheeseburgers or not, they should also consider whether or not Burger King will end the promotion, or make the promotion better. By deciding to not sell them, they could potentially lose out on future profits if Burger King raises the prices to more than $1. They should also consider the customer base; if a customer wants to go and buy just the $1 burger, they will find another Burger King that has the promotion ongoing.

The goals of a Burger King franchise and Burger King corporate are to make profits. However, Burger King corporate will attempt to increase their profits at the expense of their franchisees. That is where the misaligned incentives come from. This could potentially be able to be resolved. Burger King corporate needs to actually stop and consider if this could result in losses for their franchisees, and how they could avoid doing so; this could potentially mean getting rid of that promotion, but going for a different promotion where the item is going to profit the franchisee, and not cost at or below the production cost.

https://www.coursehero.com/file/74009847/BurgerKingdocx/