Burger King

Financing

Brands shift their attention back to smaller operators

The Bottom Line: While plenty of franchises like Subway still want large-scale franchisees, there is a movement to keep their sizes down.

Financing

BK franchisee Carrols goes from tragedy to triumph

The big Burger King franchisee has overcome a pandemic, inflation, questions about its future and the death of multiple executives to become the industry’s best turnaround story of 2023.

The executive chairman of the chain’s parent company Restaurant Brands International said operators had too much risk, particularly on the balance sheet.

The Bottom Line: The fast-food chain introduced the product in August and, according to its largest franchisee, the product has sold well. But it’s also simple to operate.

The 1,000-unit operator said sales and traffic were better than expected and margins increased by 530 basis points. And its stock took off.

Premier Kings, a 172-unit Alabama and Georgia operator whose owner died in 2022, declared Chapter 11 bankruptcy protection, citing substantial operating losses.

The burger chain is intent on “cleaning” its asset base, closing weaker stores and remodeling others in a key part of its comeback plan.

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.”

The Bottom Line: Subway and Burger King have staked their claims as value leaders in their respective segments. Recent events have highlighted the difficulties of that position.

Meridian Restaurants, the large operator that declared bankruptcy in March, is selling 70 of its 91 remaining restaurants to several different franchisees as well as the brand following an auction this month.

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