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Burger King plans to invest more than $400 million in advertising, restaurant renovations and remodeling, and to support technology and digital improvements.
In a press release Friday, the chain’s owner, Restaurant Brands International, shared details of what it calls a “retrieval of the flame” plan aimed at accelerating sales growth and boosting franchisee profitability.
Developed in collaboration with leaders from across the country and certified by over 93% of restaurants in the US.
The investment is aimed at modernizing Burger King’s restaurant portfolio and improving the customer experience, which will attract more traffic to the brand.
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A car drives through the drive-thru of a Burger King restaurant in Derry City, California. (Justin Sullivan/Getty Images/Getty Images)
In addition to building its chicken sandwich portfolio with the launch of the Royal Crispy Chicken Sandwich, Burger King said it will invest in premium branding to “ensure the flame-grilled Wiper’s high profile.”
| Ticker | Security | last one | Change | change % |
|---|---|---|---|---|
| QSR | Restaurant Brands International Inc. | 60.89 | +0.31 | + 0.51% |
While food prices at home are facing inflationary pressures, he pointed out that it will continue to offer “a strong everyday value proposition across the menu”.
In this photo gallery, a Burger King Viper is seen on April 5, 2022 in San Anselmo, California. (Justin Sullivan/Getty Images/Getty Images)
$150 million will be spent on advertising and digital investments to “fuel the fire,” and $250 million will be spent on a “Royal Reset” that includes restaurant technology, kitchen appliances, building upgrades and high-end remodeling and relocations.
In the year Through 2024, Burger King will invest $30 million on top of digital payments collected from franchisees to support the Burger King app.
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For “Royal Reset,” $50 million and matching co-investments from franchisees will go toward a restaurant renovation program for nearly 3,000 locations.
Additionally, $200 million will be spent to renovate approximately 800 restaurants.
An illuminated Burger King sign is seen on August 25, 2014 in Washington, DC. (Mandel Ngan/AFP via Getty Images/Getty Images)
It is designed to improve the return on capital and change the company’s incentive structure, obtaining more significant incentives and additional contributions, as well as upfront cash support during the completion of the restructuring.
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Contributions from the upgrade program are treated as royalty credits and recognized in the income statement over the term of the new franchise agreement or up to 20 years.
People eat at Burger King restaurant on March 10, 2022 in New York. (Michael Nagle/Xinhua via Getty Images/Getty Images)
Burger King does not expect any material negative impact on the income statement of the program and – if successful in generating sales improvements consistent with historical experience or better – the program is expected to generate a positive return on capital. And be recognized over time.
“We believe this new approach will create the momentum needed to move Burger King to a sustainable recovery program that transitions to regular capital contributions over the next two years by 2025 and beyond,” the company said.
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Tom Curtis, president of Burger King North America, said the initiative is focused on providing customers with a “superior experience.”
“I am very proud and grateful that our franchisees have once again stepped up to invest in our performance,” Curtis said in a statement.
“Ultimately, the success of this ‘Retrieve the Flame’ plan will come down to execution at the restaurant level, and we are very fortunate to have franchisees who love this brand and work closely with us to focus on the right priorities. I believe. As we improve our guest experience and drive profitable growth for the business This team, this plan and a bright future.
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