Burger King CEO resigning ahead of IPO

But the company has warned investors thinking of buying shares that a possible risk is the loss of Brenneman, Chidsey, longtime chief marketing officer Russ Klein and other key personnel.

“If we lost the services of any of these key personnel and fail to manage a smooth transition to new personnel, our business would suffer,” according to its Feb. 16 IPO filing.

Another analyst said the transition wouldn’t have much of an affect on the IPO. “I don’t think investors will view this as a very big deal. The guy who is running this is a turnaround specialist” who gets in, improves performance and leaves, said Melanie Hase, an analyst with Renaissance Capital.

The head of the chain’s largest franchisee said the move was a surprise to him, but he thought the brand’s progress would continue because it wasn’t all due to Brenneman, who is returning to his private equity firm, TurnWorks Inc., to pursue business turnarounds.

“Sure it’s a loss, but losses are funny things, when thing are going well, any piece that drops out of the equation seems like a loss. But things often work out,” said Alan Vituli, CEO of Carrols Corp., which has about 350 restaurants.

The largest group representing Burger King restaurant owners cut its ties with the company in October, reportedly because some restaurant owners said Burger King tried to exert too much control over them. But the National Franchisee Association and the company have worked to patch things up since then, and the group’s head thanked Brenneman for his contributions and said he looked forward to working more with Chidsey.

“We are making progress on improving our franchisee to franchisor relationship,” said Joe Anghelone, who became chairman of the association after previous executives resigned in protest.

Owen Blicksilver, a spokesman for Burger King Holdings’ owners, declined to comment. Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners bought the chain in 2002.

Brenneman has a long relationship with the owners. Texas Pacific Group’s David Bonderman led the investment group that bought a controlling stake in Continental and hired Brenneman there. Brenneman also once worked for Bain Capital. He said Friday he was still close to the owners and denied he was forced out.

The three private equity firms own 95 percent of Burger King Holdings and Brenneman owns just over 1 percent, according to the IPO filing. Brenneman earned $900,000 in salary and $2.25 million in bonuses in the fiscal year ended June 30.

Chidsey joined Burger King in March 2004 as North American president. Before that, Chidsey was chairman and CEO for two divisions at Cendant Corp.: one that includes Avis Rent A Car and Budget Rent A Car Systems, and one that includes tax preparer Jackson Hewitt.

Swette has served on Burger King’s board since April 2003. From 1998 to 2002, he was chief operating officer of online auction site eBay Inc.

Burger King reported net income of $49 million on revenues of $1.02 billion in the last six months of 2005, compared to $45 million on revenues of $969 million in the same period a year earlier. Before Brenneman, the company had posted losses for several years.

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