• Wall Street Journal, Thursday, September 2, 2010 10:48 AM

Burger King may be closing in on a deal with investment fund 3G Capital to take the chain private (see Karlene Lukovitz' report in this morning's Marketing Daily) but it is a franchise riddled with problems that operators and analysts blame on poor menu development, flawed pricing and a tired strategy of focusing on young people who have been disproportionately hurt by the economic slump, Julie Jargon and Gina Chon report.

"You've got females out there who want salads," Steve Lewis, who owns 36 Burger Kings, tells the reporters. "Our dessert line hasn't grown the way it needs to, and our beverage line hasn't grown the way it needs to.... You can't just be dollar king."

About six years ago, Burger King started targeting "super fans" aged 18 to 34 who average almost 10 visits a month to burger chains. With edgy marketing, the strategy worked very successfully until the economy faltered. Corporate attempts to make the food more affordable -- starting with offering a $1 double cheeseburger last year -- have been rebuffed by franchisees, who see profit margins eroding.

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