Burger King To Invest $400 Mln To Boost U.S. Sales Growth

(RTTNews) - Burger King Co. has unveiled its "Reclaim the Flame" plan with $400 million investment in U.S. restaurants, aiming to accelerate sales growth and drive Franchisee profitability.

Over the next two years, the fast-food hamburger chain will spend $150 million in advertising and digital investments to "Fuel the Flame" and $250 million for a "Royal Reset". This would involve restaurant technology, kitchen equipment, building enhancements and high-quality remodels and relocations.

The planned investment would help to enhance ongoing Franchisee investments to modernize the Burger King restaurant portfolio, touching around 3,000 restaurants.

The investment, combined with brand re-positioning plan, menu enhancements and focus on operational excellence, would help drive its aim of improving the Guest experience and attracting more traffic back to the brand over time.

In 2023 and 2024, the company expects the planned investments to have an average annual impact to adjusted earnings per share of negative $0.10 to negative $0.12, before considering benefits from any potential sales improvements. In 2025 and beyond, the impact would be accretive to adjusted earnings per share.

The "Reclaim the Flame" plan has been endorsed by Burger King Franchisees representing more than 93% of all U.S. Restaurants. They have agreed to co-invest in increased advertising firepower over the coming years.

In agreement with its Franchisees, Burger King will invest $120 million in its U.S. advertising fund over the next two years to grow traffic, and accelerate sales growth.

Following the investment period in 2023 and 2024, participating Franchisees have agreed to increase their advertising fund contributions by 50 basis points through 2028 if certain profitability thresholds are met.

In addition, the company will invest $30 million through 2024, in excess of the digital fees collected from Franchisees.

In its new menu plans, Burger King will invest in premium branding to reaffirm the elevated position of its flame-grilled Whopper and is developing new flavor extensions. As part of its efforts to build a destination worthy Chicken Sandwich portfolio, it has launched the Royal Crispy Chicken — a premium chicken sandwich with unique flavor variations.

Tom Curtis, President of Burger King North America, said, "Our plan is focused on a few important priorities — operational excellence, refreshed image, and enhanced marketing — that when put together, provide a superior experience for our Guests... Ultimately, the success of this Reclaim the Flame plan comes down to execution at the restaurant level and we are so fortunate to have Franchisees who love this brand and are working closely with us to focus on the right priorities."