Photo Credit: Burger King
The fast food restaurant, Burger King, said it would invest more than $400 million in refurbishment and advertising over the next two years. The choice was made due to the company’s report that showed poor US sales.
To examine the company’s recovery strategy for its US-based franchises, Burger King officials gathered in Las Vegas. During the annual franchisee convention, the parent company of the fast food chain, Restaurant Brands International, convened its brands to finalize the plan. The firm expects the projected investment to start bringing in profit by 2025.
Burger King said that its second-quarter revenues were unchanged. The fact that the fast food restaurant falls behind Wendy’s and McDonald’s only represents the fact that the business needs a sales boost. Burger King’s performance is something that Restaurant Brands CEO Jose Cil expressed worry over.
As the chief executive of the firm, Cil has prioritized investing in growing the sales of its brands, notably the recovery of Tim Hortons, a Burger King-affiliated restaurant. Tom Curtis, a former executive of Domino’s Pizza, was given the job of president of Burger King in the US and Canada by Cil. With Curtis on board, Cil made several improvements to the drive-thru elements of the business and urged consumers to utilize the Burger King mobile app.
More changes are coming for Burger King
Within the upcoming years, Burger King is expected to undergo major changes. The corporation will invest $200 million to renovate and upgrade more than 800 outlets around the country. Additionally, almost $50 million has been set aside for improvements to technology, kitchen furnishings, and other relevant modifications. Burger King has more than 7,000 outlets around the nation, and the management is looking to modify most franchises.
With the new adjustments, Burger King is optimistic that its sales will increase. According to the corporation’s statistics, Remodeled chains raise revenues by 12% in the first year and ultimately outperform other chains over time. In addition, in order to increase earnings, the corporation is preparing to refurbish key facilities.
“We might see remodels start to hit the market mid-2023 and going forward. It should really be a gradual ramp of the business over the course of a couple of years. We expect that to start having an impact on sales over the next quarter,” said Cil.
Burger King will make physical modifications and a 30% increase in its advertising budget, investing an additional $120 million over the next two years. This year’s second half would see the funding for its advertisements go into effect.
The development of mobile applications will also receive $30 million. This would significantly increase the number of consumers who often used the company’s mobile app—a feature that several fast food businesses are now considering.
Burger King will begin creating new recipes and ingredients for its Whoppers, Chicken Sandwiches, and other menu items, which will also result in changes to the company’s menu. The extra funds will be used to pay for employee training to ensure the greatest and tastiest cuisine is produced.
Franchisees approve the plan
93% of Restaurant Brands International franchisees supported the plan when it was presented to them. Operators will cover a portion of the money for refurbishment and staff training to carry out the objective.
Burger King will provide the franchisees the money so they may begin implementing the Restaurant Brands program. Additionally, the operators will be offered a somewhat altered incentive plan that varies from the standard framework it has maintained over the years.
“There were many long nights and plane rides,” said Curtis.
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