Burger King is investing $400 million to revitalize its American business.

Burger King is investing $400 million to improve marketing, technology and improvements at locations across the United States. / Photography: Shutterstock.

Burger King says it will invest $400 million over the next two years in marketing, improvements and improved technology, part of a broader effort to “reignite” the American business.

The Miami-based burger chain, which has lagged behind its main competitors in recent years, said it will invest $150 million in advertising and digital investments.

The company plans to invest $250 million in restaurant technology, kitchen appliances, building renovations, renovations and other areas.

Those investments come alongside franchisees’ efforts to improve the chain’s restaurants and are designed to improve the guest experience and keep people coming back to the restaurants. Burger King said franchisees representing 93 percent of its 7,000 U.S. locations approved the plan, the company’s annual franchise agreement was filed last week.

“This is not just a marketing plan,” Tom Curtis, president of Burger King North America, said in an interview. “It’s a marketing plan with support around operations and the image of the restaurant. We hit all the milestones needed to run great restaurants.

Burger King’s plan encourages operators to adjust units. / Photo by Burger King.

(Read about Burger King’s sales challenges here.)

Burger King has been working to develop its plan in recent months after the company’s sales fell from rivals McDonald’s and Wendy’s — the latter of which became the nation’s second-largest burger chain two years ago. Burger King has been among the slowest major quick-service chains to recover from the pandemic.

Those challenges were underscored by the failure of the chain’s improved chicken sandwich called Chunking, which failed to deliver the sales lift the company had hoped for—even though rivals McDonald’s and KFC have both had strong years based on their chicken sandwiches.

The company reshuffled most of its executive team and promoted Curtis to the role of president. Curtis came to the chain last year from Domino’s, where he specialized in operations.

Burger King’s “Reclaim the Flame” plan is a broad-based strategy to improve the company’s brand positioning, menu and operations. The strategy is similar to what Burger King’s sister chain Tim Hortons has done in Canada, featuring a revamped executive team and corporate investments and operational improvements, improvements and technology.

Those efforts helped improve that chain’s sales in the domestic market. “It’s a similar design to what we did at Tim Hortons in Canada,” said Jose Sil, CEO of Burger King’s parent Restaurant Brands International, in an interview. “We’ve built a good team and invested in advertising funds behind the plan.”

(Read about the return of Tim Hortons here.)

The company will add $120 million to its U.S. advertising fund, increasing ad spending by 30 percent annually. Franchisees have agreed to increase their advertising fund contributions by 50 basis points through 2028 as long as they meet certain profitability thresholds. Burger King will spend another $30 million through 2024 to support the company’s mobile app, loyalty program and improve delivery and takeout options.

The $250 million will include a $50 million investment from franchisees to renovate nearly 3,000 restaurants and add technology and equipment, as well as building improvements.

Burger King interior renovation. / Photo by Burger King.

The “Royal Reset” upgrade program will provide $200 million in funding for 800 Redmodels over the next two years.

The company is changing its incentive structure to encourage operators to renovate, moving away from traditional advertising fund discounts and royalty contributions to what Burger King calls more “significant initial incentives,” including upfront cash when renovations are completed. Operators can get additional contributions from the company for a higher royalty rate.

The program offers superior support to better operators, which the company says gives franchisees an incentive to improve operations. “The program represents a transition to high-quality upgrades and provides a convenient way to modernize the system,” Burger King said.

Burger King says the traditional remodeling will generate a 12% sales lift in the first year, plus a more than 2% sustained performance compared to its other restaurants. The company, however, is focused on “growing these results” over the next two years, which it believes will lead to a more sustainable display program over time.

As for the menu, Burger King said it plans to focus on premium wraps and flavor extensions. It is also planning more chicken sandwiches – the chain will replace Ch’king with Royal Crispy Chicken, which is easier to make and has a more unique flavor combination.

The company also announced that it is developing other products such as burgers, breakfast, drinks, snacks and plant-based products. It is also working to deliver “strong everyday value”.

“What gave us the confidence to make this historic investment in the Burger King system in America, gave me confidence in the quality of the team and leadership and the level of engagement from the franchisees,” he said. “This is not the plan we made in the lab in Miami. This team has been on the road for a long time.”

Update: This story has been updated to add new information.

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