The Burger King logo is displayed at a Burger King fast food restaurant on January 17, 2024 in Burbank, California.
Mario Tama | Getty Images
Burger King will invest another $300 million to remodel about 1,100 of its U.S. restaurants as part of a broader turnaround effort, the chain’s parent company said Tuesday.
owner Restaurant Brands International Burger King’s turnaround strategy began a year and a half ago with $250 million to renovate restaurants and upgrade its technology and equipment, as well as an additional $150 million to invest in its mobile app and advertising. Millions were involved.
In January, the parent company bought Burger King’s largest U.S. franchisee, Carroll’s Restaurant Group, for $1 billion to speed up the remodeling process. The company estimates it will spend an additional $500 million updating 600 Carrolls locations.
Including the investment announced Tuesday, Restaurant Brands plans to spend about $2.2 billion to revive the chain’s U.S. business. The company expects 85% to 90% of its nearly 7,000 U.S. restaurants to have the same modern design by 2028.
“This was the first time in a long time that RBI had put a significant amount of capital back into the business to invest together with franchisees,” Burger King US President Tom Curtis told CNBC. “I think the process was, ‘Let’s see how this works’… and we’re seeing the early results of repurposing.”
To date, nearly 100 Burger King locations have been remodeled and updated. According to Curtis, these locations have seen an increase in sales since their facelift.
The latest round of remodels will follow Burger King’s new “Sizzle” design, which includes drive-thru pickup for mobile orders and self-order kiosks. These new features are expected to encourage customers to order even more hoppers and fries.
Still, Burger King had to spend its own money to incentivize franchisees to redevelop. Renovations can be expensive — especially with high interest rates — and often require temporary shuttering of locations.
As with early stage investments from restaurant brands, Burger King franchisees that choose to redevelop their locations will receive cash after construction is complete. Burger King will let operators choose how much of a discount they receive on royalties paid to the company.
Beginning Tuesday, Curtis will be on a road show across the U.S. to present strategies for rebuilding franchises and begin the sign-up process for a $300 million investment.
Credit : www.cnbc.com