Burger King is doubling down, or perhaps tripling down, on its push to spruce up more restaurants.
The Miami-based burger chain on Tuesday said it plans to invest another $300 million to extend its “Royal Reset” remodel program through 2028. The investment comes on top of $250 million the company is currently investing as part of its $400 million “Reclaim the Flame” revitalization program.
That comes along with Burger King’s $1 billion acquisition of the franchisee Carrols Restaurant Group that will lead to 600 remodeled restaurants on its own. By the end of 2028, Burger King expects to have as much as 90% of the chain’s 7,000 restaurants in the brand’s new image.
“At Burger King U.S., we’ve now committed more than $2 billion to put the brand on the right track,” Patrick Doyle, executive chairman of Burger King parent Restaurant Brands International, told analysts on Tuesday. “In addition, we will be seeing billions of dollars of accelerated investments from franchisees.”
For Burger King, the remodels are key to the brand’s sales growth. Executives are putting a lot of money into the effort, believing that customers prefer dining from restaurants that are new and fresh.
That, paired with an effort to improve operations, is designed to improve the everyday customer experience.
“When you get to the point where the vast majority of your restaurants are reimaged, you get a bit of a catalytic effect from that,” Doyle said. About half of the chain’s locations are currently remodeled.
Burger King on Tuesday said that same-store sales in the U.S. and Canada increased 3.8%, a slowdown from the 6.4% growth in the fourth quarter, parent company Restaurant Brands International (RBI) said Tuesday.
But the key metric was up 12.5% on a two-year “stacked” basis, compared with 8.6% in the fourth quarter.
Same-store sales increased 5.7% at Popeyes, RBI said, 6.9% at Tim Hortons and 0.3% at Firehouse Subs. Same-store sales increased 4.2% in the brands’ international markets.
Revenues at RBI increased 9.4% to $1.7 billion in the quarter. Net income increased 18% to $328 million, or 72 cents per share.
Much of RBI’s attention over the past year has focused on its Burger King brand, which struggled with low unit volumes and low profitability for years and then struggled to generate sales recovery coming out of the pandemic.
That led to a rash of franchisee bankruptcy filings in early 2023, along with hundreds of store closures. Burger King has closed more than 325 locations over the past two years, according to data from Restaurant Business sister company Technomic.
That spurred an executive overhaul at the brand while RBI brought in former Domino’s CEO Patrick Doyle to be CEO. And it spurred what will ultimately be more than $2 billion worth of investments, including the Carrols acquisition, the Reclaim the Flame plan and various remodels.
Burger King has spent $81 million of its initial $250 million in remodel investments, and $79 million of $150 million targeted at marketing.
UPDATE: This story has been updated to include information from the company’s first quarter earnings call.
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