Financing

Burger King's revitalization enters a new chapter

The fast-food chain has a new prototype that is targeted at digital orders and simplifies the workspace for employees. The company also plans a further evolution in its marketing as part of the next phase of “Reclaim the Flame.”
Burger King
Burger King's new "Sizzle" prototype. | Photos and video courtesy of Burger King.

The problem with a lot of restaurants these days is they were not built for the 2023 consumer. It’s all about dine-in sales and drive-thru. They didn’t envision kiosks, mobile orders or third-party delivery.  

 “We’ve had restaurants that were built for drive-thru,” Tom Curtis, president of North America for Burger King, said in an interview. “They were built for people to come in, pick up their food and sit down to eat. These days, everybody wants to work on their phone. More people are ordering on a kiosk.”

The Miami-based burger chain has been quietly developing a new prototype to change that. The “Sizzle” prototype is designed to focus more on the digital consumer while making life easier for employees. “It’s really going to help us have a consistent, frictionless experience for digital,” Curtis said.

The new prototype is what Curtis called “Chapter 2” of the Burger King “Reclaim the Flame” revitalization initiative.

Burger King, which had been struggling in recent years with weak sales and weaker profitability, leading to bankruptcies and large-scale closures, announced plans to invest $400 million into marketing and remodels to turn those trends around.

Check out the new prototype

The first phase involved steering operators to remodel locations, and Curtis said the company expects 300 to 350 of the chain’s 7,000 U.S. restaurants to remodel their restaurants this year. The marketing efforts featured a new ad campaign, featuring the “Whopper Whopper” jingle that proved popular.

The results, coupled with easing costs, have been strong. Same-store sales have increased for each of the past five quarters. On a two-year “stacked” basis, that metric rose 8.2% in the first quarter and 8.7% in the second quarter.

Perhaps more importantly, franchisee profitability has improved. After two large franchisees filed for bankruptcy earlier this year and many others closed, operators’ financials appear to have stepped back from the ledge. Carrols Restaurant Group, Burger King’s largest franchisee, has seen its stock soar 400% this year thanks to improved profitability.

Curtis himself recently returned from the company’s franchisee convention. He said the atmosphere was different this year compared with a year ago. There was “a little bit of swagger coming into the room” with operators celebrating progress.

“Last year’s convention was about hope and a plan with a lot of stress,” Curtis said. “This year’s convention was about hope and a plan with belief mixed in.”

Yet, he acknowledged, there is more work. “It’s a good start,” he said. Franchisees, he said, wanted to make sure that the company remained on task to keep the revitalization program going. Indeed, for all its improvement, the company’s average unit volumes were still 25% lower than rival Wendy’s. Its two-year same-store sales were still 570 basis points lower than the much larger McDonald’s.

The next phase of the company’s Reclaim the Flame plan involves a further evolution in the chain’s marketing. Rather than focus much of its marketing on the Whopper, Burger King plans to market more of its biggest differentiator: Its flame-grilled burgers.

“The Whopper is definitely a flagship, but it’s not the differentiator,” Curtis said. “The differentiator is the flame grilling.” The company wants to remind customers of that differentiator, and how it gives off a more “smoky, backyard flavor.”

burger king have-sies

Burger King will give customers the option of getting both onion rings and fries with combo meals. | Photo courtesy of Burger King.

But the company also wants to lean further into its other differentiator, its “have it your way” mantra, now known as “You Rule.”

An early part of that marketing evolution was introduced this week when the chain announced “Have-sies,” giving customers the option of getting both fries and onion rings with their combo meals. “We’re the only of the large brands that have both fries and onion rings,” Curtis said.

The promotion markets that fact while not making life too difficult for the chain’s franchisees. “It’s not too operationally complex,” he said. “But that’ll be another nod to customization.”

Remodels and store upgrades will be another key element in the company’s revitalization plan. The company has spent much of its year preparing to get stores remodeled, getting permits and lining up contractors. But the company is now seeing more projects complete. 

The redesign is also key. Burger King and a group of franchisees have been working on the redesign. They traveled to Europe and parts of the U.S. to help develop the format.

The new prototype will improve operations. For instance, the restaurants use an expeditor who puts together orders for the different modes of service, front counter and drive-thru, for instance. With the new prototype “it only takes a couple of steps to get to each one of the places,” Curtis said.

It is designed to improve mobile order pickup, either inside or through the drive-thru. And it may pave the way for an expansion of kiosks. Burger King has been testing kiosks, and that is still in phase two. But he seems convinced that kiosks are coming. “The American consumer is ready for the kiosk,” he said.

There are just two of the chain’s new prototypes built, in North Carolina and Las Vegas. But Curtis expects that number to accelerate next year as operators shift to the new model. “Franchisees when they saw it were jumping in line to see who can do the next one,” Curtis said. “We’ll have more prototypes coming up. We’re going guns a-blazing into the Sizzle redesign.”

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