The Burger King logo is displayed at a Burger King fast food restaurant on January 17, 2024 in Burbank, California.
Mario Tama | Getty Images
Burger King will invest an additional $300 million to renovate its approximately 1,100 U.S. restaurants as part of a broader turnaround plan, the chain’s parent company said on Tuesday.
owner International restaurant brand Burger King launched Comeback strategy A year and a half ago, the company spent $250 million to renovate restaurants and upgrade technology and equipment, and invested an additional $150 million in mobile apps and advertising.
In January, the parent company acquired Burger King, the largest restaurant in the United States. franchiseeCarrolls Restaurant Group invested $1 billion to speed up the renovation process. The company expects to spend an additional $500 million to update 600 Carrolls stores.
Including the investments announced Tuesday, Restaurant Brands plans to spend about $2.2 billion to revitalize the chain’s U.S. operations. The company expects that by 2028, 85% to 90% of its approximately 7,000 U.S. restaurants will feature the same modern design.
“This is the first time in a long time that RBI is putting significant capital into the business, co-investing with franchisees,” Burger King U.S. President Tom Curtis told CNBC. “I think the process is, ‘Let’s Let’s see how this works’… We’re seeing the early results of the transformation.”
To date, about 100 Burger King stores have been remodeled and updated. Curtis said those locations saw an increase in sales after the facelift.
The latest round of renovations will follow Burger King’s new “Sizzle” design, which includes drive-thru pickup and self-order kiosks for mobile orders. The new features are expected to encourage customers to order more Whoppers and fries.
Still, Burger King has to spend its own money to incentivize franchisees to make the changes. Renovation works can be costly, especially where interest rates are high, and often require the temporary closure of these premises.
As with the restaurant brand’s first round of investment, Burger King franchisees who choose to remodel their locations will receive cash once construction is completed. Burger King will let owners choose how much of a discount they want on royalties paid to the company.
Starting Tuesday, Curtis will be on a roadshow across the U.S. pitching the transformation strategy to franchisees and kicking off the registration process for a $300 million investment.
Restaurant Brands shares were flat in premarket trading Tuesday. report Earnings were weaker than expected, but its quarterly revenue topped Wall Street expectations. Burger King’s first-quarter same-store sales grew 3.8%, lower than StreetAccount’s forecast of 4.1%.
