Burger King invests another $300 million to remodel restaurants

Burger
King
will
invest
another
$300
million
to
remodel
about
1,100
of
its
U.S.
restaurants
as
part
of
a
broader
turnaround
effort,
the
chain’s
parent
company
said
Tuesday.

Owner


Restaurant
Brands
International
kicked
off
Burger
King’s

comeback
strategy
a
year
and
half
ago
with
$250
million
to
renovate
restaurants
and
upgrade
its
technology
and
equipment,
plus
an
additional
$150
million
to
invest
in
its
mobile
app
and
advertising.

In
January,
the
parent
company
bought
Burger
King’s
largest
U.S.

franchisee,
Carrols
Restaurant
Group,
for
$1
billion
to
speed
up
the
remodeling
process.
The
company
estimates
it
will
spend
an
additional
$500
million
updating
600
Carrols’
locations.

Including
the
investment
announced
Tuesday,
Restaurant
Brands
is
planning
to
spend
around
$2.2
billion
to
revitalize
the
chain’s
U.S.
business.
The
company
expects
85%
to
90%
of
its
roughly
7,000
U.S.
restaurants
will
have
the
same
modern
design
by
2028.

“It
was
the
first
time
in
a
long
time
that
RBI
had
invested
a
significant
amount
of
capital
back
into
the
business
to
co-invest
with
franchisees,”
Burger
King
U.S.
President
Tom
Curtis
told
CNBC. “I
think
the
process
was, ‘Let’s
see
how
this
works’…
and
we’re
seeing
early
results
on
remodels.”

About
100
Burger
King
locations
have
been
remodeled
and
updated
so
far.
Those
locations
have
seen
sales
climb
following
their
facelifts,
according
to
Curtis.

The
latest
round
of
remodels
will
follow
Burger
King’s
new “Sizzle”
design,
which
includes
drive-thru
pickup
for
mobile
orders
and
self-order
kiosks.
Those
new
features
are
expected
to
encourage
customers
to
order
even
more
Whoppers
and
fries.

Still,
Burger
King
has
had
to
chip
in
its
own
money
to
incentivize
franchisees
to
remodel.
Renovations
can
be
costly
—
especially
with
high
interest
rates
—
and
often
require
the
locations
to
temporarily
shutter.

As
with
the
initial
round
of
investment
from
Restaurant
Brands,
Burger
King
franchisees
who
opt
in
to
remodel
their
locations
will
receive
cash
once
construction
is
completed.
Burger
King
will
let
operators
choose
how
much
of
a
discount
they
get
on
the
royalties
they
pay
to
the
company.

Starting
Tuesday,
Curtis
will
be
on
a
roadshow
across
the
U.S.
pitching
the
remodeling
strategy
to
franchisees
and
starting
the
sign-up
process
for
the
$300
million
investment.

Shares
of
Restaurant
Brands
were
flat
in
premarket
trading
on
Tuesday
after
the
company

reported
weaker-than-expected
earnings,
but
its
quarterly
revenue
topped
Wall
Street
estimates.
Burger
King’s
same-store
sales
grew
3.8%
in
the
the
first
quarter,
falling
shy
of
StreetAccount
estimates
of
4.1%.