Daniel Schwartz has no plans to become the CEO of another company, he said Wednesday during a special conference call. Earlier in the day, Restaurant Brands International, the parent company of Burger King, Tim Hortons, and Popeyes announced that Schwartz left his position to take the role of chairman and co-chairman of the company’s board of directors. Jose Cil, an 18-year Burger King veteran, was promoted to Schwartz’s former spot, effective immediately. Chief technology and development officer, Josh Kobza, also shifted into the company’s chief operating officer post.

Why did RBI shake up its leadership structure? Not for the typical reasons you might see a company of this size rearrange its C-suite. For instance, Schwartz said, he plans to “be way more active” than a typical chair. “I’m going to still be deeply, deeply involved in the business going forward,” he said.

There were a few developments and targets that prompted the change, RBI outlined in the call. One is the announcement that Schwartz will take on additional responsibilities as a partner at 3G Capital. The change will give him a chance to focus on some areas that didn’t quite fit into the day-to-day grind. They are longer-term directional plays: key strategic decisions, capital allocation, and the assessment of M&A opportunities.

To rewind, on the latter note, 3G Capital’s success since taking control of Burger King for $1.56 billion nine years ago is significant.

Burger King’s systemwide sales have increased to more than $20 billion. Its net restaurant growth accelerated from roughly 170 restaurants per year to more than 1,000 per year, bringing the total to 17,796.

RBI has also more than doubled Burger King’s adjusted EBITDA from $454 million back in 2011 to about $950 million on a trailing 12-month basis as of Q3 2018.

Any deal RBI might make from here on will be industry shaking, like its 2017 $1.8 billion purchase of Popeyes. RBI was formed, in name, when Warren Buffet’s Berkshire Hathaway was brought into the fold following an $11 billion takeover of Tim Hortons in 2014.

Schwartz was asked to elaborate on his additional M&A responsibilites during the call. A report surfaced Wednesday, per a Deal reporter, that Papa John’s was mulling over selling to RBI. The news surged the struggling pizza chain’s stock close to 8 percent at close. RBI wasn’t asked about that specific possibility and didn’t come close to hinting at any individual deal.

“As you begin your new role, is there anything that leads you to believe RBI does not have the capacity for fourth brand?” an investor asked.

“I think, we’ve proven historically, [that] we’ve been very disciplined and balanced when it comes to capital allocation, whether it be increasing our dividend or repurchasing shares or acquiring additional brands that we’ve very successfully done in the past and we’ll continue to operate with this balanced approach of capital allocation,” Schwartz said.

He added later: “We’ve always been opportunistic when it comes to the M&A. We’ve been very disciplined with respect to our capital allocation, having a good balance of investing back in the business, returning capital to shareholders both through dividends and share repurchases. And there’s no set formula, but we like to be opportunistic and we’re always looking at valuable uses of our capital. We’ve proven in the past, we can do a number of things and it’s something that we’re going to continue to monitor into the future.”

Schwartz was questioned once more toward the end of the call but didn’t waver, bringing the word “opportunistic” up again.

“What we said in the past is that we look at companies and brands that are iconic brands that we can grow significantly for the long run,” he said.

So the case remains open for now.

Introducing Jose Cil

Cil served as the president of Burger King since 2014. He said stepping into the CEO position at RBI would allow him “to more formally focus on these key areas to drive continued long-term growth at Burger King, Tim Hortons, and Popeyes.” He also dropped an M&A carrot, saying, “importantly, it also allows Dan to focus even more on his particular strengths, including capital allocation and key strategic decisions, such as the assessment of potential M&A opportunities.”

Those “key areas” he was referencing revolved around operations, marketing, restaurant development, and franchise relations. One thing to note: Cil said the leadership changes wouldn’t affect how the three brands are being run today. There are no plans to replace his role at Burger King and all regional presidents will continue to report to Cil directly.

“There is no need to add change where it isn’t required,” he said.

Net restaurant growth has always played a major role in RBI’s business lexicon. If you look at this past fiscal year and quarter the proof is crystal.

Burger King’s net restaurant growth in Q4, year-over-year, was up 6.1 percent. Burger King had 17,796 restaurants compared to 16,767 in the prior-year period.

Popeyes was even higher at 7.3 percent as it expanded from 2,892 restaurants to 3,102.

Tim Hortons upped 2.1 percent to 4,846 restaurants from 4,748. As a company, RBI’s net growth was 5.5 percent consolidated. The system comprised of 25,744 locations versus 24,407.

That has outpaced same-store sales growth. In Q4 it broke down as follows: Burger King 1.7 percent; Popeyes 0.1 percent; Tim Hortons 1.9 percent.

Cil noted that Popeyes is seeing the progress of development deals signed in recent quarters, and that “they’re beginning to pay dividends and we’re beginning to see an acceleration of growth in the U.S. business from a developing standpoint.”

Schwartz said promoting Cil was a natural evolution given how RBI has managed its business on a day-to-day basis for some time now, with Kobza overseeing development efforts and Cil working closely with master franchisees.

“Given that this was kind of how the business was being managed and José’s expertise in operations and marketing and the emphasis that our strategic plan places on those areas and where I was spending my time, we thought this was a natural way to formalize how we are already running the business,” Schwartz said.

What this means for technology

A natural question would be, with Kobza shifting direction, will Burger King’s tech efforts veer down a different course? Last January, the company created the chief technology and development officer position to address what Schwartz called “perhaps the most critical area of any consumer business today.” And there was a prevailing notion across the quick-service landscape that RBI, mainly Burger King, trailed some of its competitors in the tech arena. Kobza, then the CFO, jumped into the position and was tasked with “enhancing our brands’ guest experience through technology and innovation,” RBI said.

In the past year, RBI made great strides. It’s launched mobile apps across all three brands in the U.S. and Canada. There are now kiosks that can be deployed in Burger King and Tim Hortons restaurants. RBI also introduced the ability to order delivery across all three chains “in hundreds of thousands of restaurants all across North America and globally,” Kobza said. Additionally, upgrades to the company’s POS infrastructure are ongoing at some of RBI’s brands “that had a more fragmented or older infrastructure in North America.”

Kobza said this progress wouldn’t stall with his promotion. “While I’m taking on a bit broader role going forward, I look forward to continuing to spend a lot of time with our team continuing to focus very closely on technology, as we very much think it’s a critical piece and a very important piece to driving sales growth going forward,” he said.

Some additional notes on Burger King

Given that Burger King lapped its toughest quarterly comp in 2017 (5.1 percent) on the U.S. side, its 0.8 percent growth was impressive. Cil said Burger King is at its best “when we have a balanced offer and a balanced marketing plan that we share with our guests.”

This past quarter, Burger King went value heavy with the 10 nuggets for $1 promotion and balanced that strength with the 2 for $6 deal. He said the chain also had a solid launch in premium with the Philly Cheese King, which drove some of its check-driven lift in Q4.

Lastly, he credited the Whopper Detour campaign for generating some interesting news concerning the company’s mobile app. Using geofencing around McDonald’s locations, Burger King allowed customers to access a 1-cent Whopper deal when they were within 600 feet of its top competitor’s restaurants. Cil said it showcased Burger King’s new app with order and pay features.

He quipped, “I don’t like to mention them by name,” when referencing McDonald’s in the deal, adding, “It was a fun promotion that drove a lot of downloads and also allowed us to focus on our flame-grilling heritage.”

Fast Food, Story, Burger King, Popeyes, Tim Hortons