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Coming soon: The Burger King of the future

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Burger King Holdings Inc. (NYSE: BKC) announced plans Wednesday to overhaul its 12,000 locations worldwide. The fast-food giant is seeking a sleeker, futuristic look that includes LCD-screen menus, rotating chandeliers, and corrugated metal and brick accents (see pictures at the above link) on the inside, as well as metal canopies and additional signs on the exterior.

The new upscale design, called 20/20, is expected to cost franchisees between $300,000 to $600,000 per restaurant. Some 60 locations have already been remodeled, including in Miami, Mexico City, Edinburgh, and Shanghai, and 75 more are expected to be completed by the end of 2010. All new restaurants will be built using the 20/20 design.

The new look is expected to help the Burger King compete with "fast casual" restaurant chains such as Chipotle (NYSE: CMG) and Panera (NASDAQ: PNRA), as well as to set it apart from larger rival McDonald's (NYSE: MCD) and other, regional chains. But some doubt whether the redesign will result in the growth in sales that Burger King projects, or whether franchisees will be eager to pony up given the state of the economy. Burger King franchise owners are contractually obligated to update their restaurants periodically.

Shares of Miami-based Burger King have been stuck in the $16 to $18 range in the past few months, well off the 52-week high of $24.48. Analysts surveyed by Thomson Reuters are expecting year-over-year revenue growth of 1.9% this year and 4.2% next year, as well as projecting long-term EPS growth of 14.3%, which better than that of rivals McDonald's and Yum! Brands (NYSE: YUM).

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Last updated: December 28, 2009: 06:52 AM

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