Burger King has announced an additional $300 million co- investment with franchisees to accelerate the modernization of its restaurants across the United States. The goal is to have 85%-90% of its units remodeled by 2028.
This comes after the Miami, Florida-headquartered company, a subsidiary of Restaurant Brands International, initiated a $250 million investment in modern image, technology and new kitchen equipment in September 2022 as part of its “Reclaim the Flame” plan, and a further $500 million to accelerate the reimaging of more than 600 Carrols Restaurant Group operations owned Burger King following the pending acquisition of Carrols.
The “Reclaim the Flame” plan also included $150 million in incremental digital and media investments through 2024 (“Fuel the Flame”) followed by an agreement with franchisees to increase their investments in advertising from 2025-28 should certain franchisee profitability metrics be achieved.
The investments have driven strong early results, including record average US Franchisee profitability in 2023, on the path to the fast food chain’s publicly stated goal of achieving $300,000 in average EBITDA in its US restaurants.
In January, Burger King announced plans to acquire Carrols, the brand’s largest franchisee in the United States, for an enterprise value of approximately $1 billion. This was coupled with a plan to remodel approximately 600 of the over 1,000 acquired Burger King restaurants utilizing the operating cash flows of Carrols and bringing the Carrols portfolio to fully modern image by 2028. The company expects to refranchise substantially all of the Carrols portfolio to smaller, local operators within three to seven years after completion of the acquisition.
Founded in 1954, Burger King brand is a global quick service hamburger chain known for the iconic flame grilled Whopper sandwich. It operates at more than 19,000 locations in over 100 countries and US territories. Almost 100% of Burger King restaurants are owned and operated by independent franchisees.
Its parent company, Toronto, Canada-headquartered Restaurant Brands International (RBI), is one of the world’s largest quick service restaurant enterprise with over $40 billion in annual system-wide sales and more than 30,000 restaurants in over 120 countries and territories. In addition to Burger King, it owns the Tim Hortons, Popeyes and Firehouse Subs independently operated brands.
RBI’s Q1 2024 consolidated system-wide sales, reported on April 30, grew 8.1% year-over-year. Consolidated comparable sales increased 4.6% and net restaurants grew 3.9% versus the prior year. Income from operations totaled $544 million versus $447 million during the previous year, while net income of $328 million was up from $277 million during the same period in 2023.
