Burger King is a chain of fast food restaurants at its best

Burger King has announced plans to pump half-a-billion dollars into an effort to modernize more than 600 of its restaurants across the country in the next seven years.

The restaurants that will receive makeovers are specifically operated by Carrols Restaurant Group, the fast food chain’s largest franchisee, which was recently acquired by Restaurant Brands International – BK’s parent company.

The company, which already owned 15 percent of Carrols’ stock ahead of the May 16 announcement, signaled its plan to acquire the public company back in January.

In total, the deal is worth about $1billion, according to Franchise Times.

Ahead of the acquisition, Carrols owned more than 1,000 Burger King restaurants in some 23 states, in addition to 60 Popeyes Chicken restaurants in six states.

Last fiscal year, which ended for the company in late September 2023, the company’s sales from those entities topped $1.8billion.

Burger King plans to refranchise nearly all of the restaurant units from the Carrols portfolio to smaller franchisees in the next five-to-seven years.

Company president Tom Curtis said earlier this year that they will be looking for franchisees with 50 stores or fewer. Executives say they are looking to focus on restaurant operators, rather than just the owners.

The CEO of Carrols, Deborah Derby, noted that she feels it will be a benefit to shareholders for the stores to get remodeled sooner rather than later.

‘For our team, this is very exciting. We believe our team will have additional career opportunities as part of the greater RBI family,’ she said back in January on the investor call when the deal was announced.

Prior to this acquisition, Burger King was operating just 175 corporate stores out of the roughly 6,000 in the US.

The brand is currently in the middle of a campaign to ‘Reclaim the Flame,’ which was announced in 2022.

As the ‘Home of the Whopper’ noticeably lagged behind some of its competitors, the company announced a $400million investment into an enhanced marketing effort.

A second $300million investment was announced in April to speed those plans along.

In 2022, BK’s sales hit about $25.5billion – an 8.7 percent increase from the last fiscal year.

But, domestically, the brand has struggled with its performance as franchisee profitability took a dip amid an apparent traffic-flow issue.

Sales grew during the third quarter of 2023, making up for declines seen in previous quarters, which RBI CE Josh Kobza, at the time, called ‘progress.’

Total restaurant sales again rose in the final quarter of 2023, which corresponded to a 2.9 percent increase in traffic reported by Carrols.

RBI’s bid to reclaim control of the Carrols-owned restaurants arrives in the direct aftermath of three major BK operators filing for bankruptcy last year.

TOMS King, Premier Kings, and Meridian Restaurants Unlimited, all filed for bankruptcy as the ailing burger business left them no choice.

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