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Medium Profitability

Crunch Yo’ Burger

#Food Service #Fast Food
ProHub Comment

This case tests structured problem-solving and quantitative analysis. The candidate must diagnose a profitability gap through comparative financial analysis, then develop and calculate the impact of an operational solution. The case requires both strategic thinking (identifying non-food variable costs as the root cause) and execution skills (performing multi-step calculations with market-sizing estimations).

Estimated Time 15 minutes
Difficulty Medium
Source IESE
50 / 100
You are the CEO of a large multinational fast food chain. In recent years, you have noticed that your profitability in the US has been lagging behind competitors. Your Board of Directors would like to know: Why profitability is below that of competitors and How you plan to get profitability back in line.

Clarifying Information

  1. Your company sells fast food that is cooked onsite (similar price point to McDonald’s/Subway)
  2. Crunch Yo’ Burger operates all its own stores (i.e. no franchises)
  3. There are four major players in the market, differentiated only by the type of food they offer (prices are the same): Crunch Yo’ Burger makes hamburgers, TacoCo sells tacos and other Mexican food, NoodleCo is focused on different varieties of noodles, PizzaCo sells pizzas
  4. We are concerned only with the US operations of Crunch Yo’ Burger and its competitors
  5. Our customers can be either takeout or eat-in customers