Burger King’s stock has outpaced its main rival, McDonald’s Corp. Some people worry the stock is getting too expensive, I think it gets reasons for that.

The high price in stock may be a cause of its innovation to its menu. French-fry burger and low-fat “Satisfries” are its new items which claim to have fewer calories.These new items meet shifting consumer tastes as more and more people are having obesity problem and they need fewer calories food.

Also, it may be a cause of  Burger King’s business model– the franchisee model . Burger King’s model means most capital costs are borne by franchisees. Nowadays, up to 97% of Burger King’s stores are owned by franchisees. Franchisees pay Burger King for royalties. This help reduce Burger King’s costs and get it a stronger cash flow so that it can set up more stores all around the world.

Reference:

http://www.theglobeandmail.com/globe-investor/investment-ideas/burger-kings-whopper-of-a-turnaround/article15126214/