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Burger King Reveals Revival Plan with $400 Investment on Store Upgrades, Advertisement

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Photo Credit: Burger King

Fast food chain Burger King announced that the company would spend over $400 million in the next two years for its renovation and advertisements. The decision follows the report of the company revealing low revenues in the United States.

Burger King management convened in Las Vegas to discuss the company’s turnaround mission for its US-based chains. The fast food chain’s parent company, Restaurant Brands International, gathered its brands during the annual franchisee convention to finalize the plan and envisions the planned investment to generate revenue for the company by 2025.

During the second quarter, Burger King reported stagnant sales. The fast food chain trails behind McDonald’s and Wendy’s, only proving that the company lacks a boost in its sales. The CEO of Restaurant Brands, Jose Cil, said he was concerned regarding Burger King’s performance.

As the company executive, Cil has been keen on making investments to increase the sales of its brands, including the revival of Tim Hortons, a sister chain of Burger King. Meanwhile, Cil also assigned Tom Curtis, the former executive of Domino’s Pizza, to become president of Burger King in the US and Canada. With Curtis on deck, Cil ordered several changes in the company’s drive-thru features and encouraged their customers to use the Burger King mobile application.

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More changes for Burger King

Burger King is slated for dynamic changes within the next years. The company will spend $200 million to rehabilitate and improve around 800+ locations across the United States. In addition, enhancements of technology, kitchen equipment, and other related changes have been allocated around $50 million. Burger King has over 7,000 locations in the country, and the management looks to make changes in most chains.

Burger King is confident that more revenue will start coming with the new changes. According to reports by the company, remodeled chains bring in a 12% increase in sales during the first year and eventually outperform other chains in the long run. That is why the company is gearing to remodel strategic locations so it can maximize profit.

“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 the couple of years. We expect that to start having an impact on sales over the next quarter,” Cil said in an interview.

Apart from physical changes, Burger King will also amp up its advertisement department by 30%, spending around $120 million more in the next two years. The additional funding for its ads would take effect in the latter part of this year.

Moreover, $30 million would be poured into mobile application improvements. This would radically encourage many customers to frequently use its mobile app, a feature that many fast food chains are currently looking into.

Changes to the company’s menu are also on their way, as Burger King will start developing new flavors and ingredients for its Whoppers, Chicken Sandwich, and other menus. The additional funding will be directed to training employees to produce the best and most delicious menu.

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The plan receives thumbs up from franchisee

When Restaurant Brands International presented its strategy, 93% of its franchisees expressed support. As an effort to put the vision into effect, operators will counterpart some of the funds that would be allocated to renovations and employee training.

The franchisees will receive the fund from Burger King so they can start implementing the program presented by Restaurant Brands. In addition, the operators will be presented with a revamped incentive model slightly different from the usual structure it has adapted throughout the years.

“There were many long nights and plane rides,” said the US and Canada Burger King president.

Source: CNBC

Opinions expressed by Economic Insider contributors are their own.

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