Burger King ups ante with added investment in restaurant modernization plan
Burger King Company has made an additional investment to update the image of its U.S. locations.
The quick-serve hamburger chain announced an additional $300 million investment to accelerate the modernization of its restaurants across the United States. This follows a $250 million investment in modern image, technology and new kitchen equipment (dubbed "Royal Reset") in September 2022 as part of Burger King's “Reclaim the Flame” plan, and a further $500 million to accelerate the update of more than 600 Carrols Restaurant Group owned Burger King restaurants following the pending acquisition of Carrols.
Launched in September 2022 , the “Reclaim the Flame” strategy is designed to accelerate sales growth and drive franchisee profitability. The plan includes the modernization program, which includes remodels of approximately 800 locations to a more modern image.
The additional $300 million investment will launch an expanded co-investment program, called "Royal Reset 2.0", which builds on the initial success of the existing modern image investments. The program will provide cash incentives to top performing and committed operators to support quality remodels and rebuilds. It unlocks the opportunity to complete approximately 1,100 additional remodels through 2028.
As a result of the Royal Reset programs and planned Carrols remodels, Burger King said it now has a clear path for 85% to 90% of its restaurants to have a modern image by 2028.
"We are committed to giving our guests the very best experience in all our restaurants and that includes a modern, exciting restaurant image and digital experience that exceeds their expectations,” said Tom Curtis, president of Burger King North America. “We are working in close partnership with our Franchisees to transform our restaurant footprint across the country and reclaim our flame as a leader in the QSR industry."
Earlier this year, Burger King unveiled its next generation restaurant design, which it said is seeing strong results. The new design is a reimagined, flexible format grounded in all aspects of the customer and employee experience, with an emphasis on the digital, pick-up and drive-thru experience. Remodel projects as part of the Royal Reset 2.0 investment will feature the new design.
Burger King said its investments in restaurant updates have driven strong early results, including record average U.S. franchisee profitability in 2023, well as strong sales uplifts from the 100 Royal Reset remodels that have been completed and reopened for at least six months.
Carrols
In January, Burger King announced plans to acquire Carrols, the brand's largest U.S. Franchisee, for an enterprise value of approximately $1 billion. To further accelerate the brand's turnaround, this was coupled with a plan to remodel approximately 600 of the over 1,000 acquired Burger King restaurants utilizing the operating cash flows of Carrols and bringing the Carrols portfolio to fully modern image by 2028.
The company expects to refranchise substantially all of the Carrols portfolio to smaller, local operators within 3 to 7 years after completion of the acquisition.
The Burger King system operates more than 19,000 locations in more than 100 countries and U.S. territories. Almost 100% of Burger King restaurants are owned and operated by independent franchisees.