The turnaround track
After years of helping run Burger King and launching the “Reclaim the Flame” program last year with another ex-Domino’s executive, Tom Curtis, now president of the U.S. and Canada for Burger King, what Kobza sees today is commitment to “a very substantial investment” by RBI. “It’s a big and comprehensive plan to address all the areas that need focus over a multiyear period and brings the franchisees along. We’ll put in a lot of money up front, but it requires franchisees to have the confidence to invest as well. There’s a strong element of partnership and a long-term perspective.”
Adds Doyle, “We’re putting additional dollars in, and assuming we get franchisees to certain levels of profitability, they’ll pick it up and invest more into the brand in 2025 and 2026.”
To be sure, some Burger King franchisees face significant difficulties both in awaiting major improvements from the franchisor and coping with their own challenges, including rising wages and other costs, and the paucity of labor. Meridian Restaurants Unlimited, for instance, a 120-unit Burger King franchisee operating across the Plains and western mountain states, declared bankruptcy in March citing those and other issues.
And a couple of weeks after that, EYM King of Michigan, which operates in southern Michigan, moved to close 26 locations and lay off 424 employees after failing to reach a deal with RBI over undisclosed issues.
Kobza concedes franchisees “needed a comprehensive plan for meaningful investment from us to get momentum in the business again and for them to believe we were putting their success front and center. We have that plan in place, and though it is early, the steps we took to emphasize their profitability [were important].”
Doyle adds, “Restaurants haven’t looked the way they need to” in part because of franchisees’ difficulties. “We need to work cooperatively to improve their cash flow and other things to make their businesses great again. We’ve made a lot of progress in the last several months.” Burger King franchisees’ profitability was up by about 40 percent in the fourth quarter over a year earlier, Kobza says.
At the same time, Burger King has a challenging path ahead to get its digital technology up to par with the rest of the industry. “We have a lot of work to do, but we’re partway through,” Kobza says. Of the $400-million internal initiative, he explains, about $50 million is “just for franchisees to upgrade the technology in their restaurants: point-of-sale terminals, screens in the back of the restaurants, cabling—all will get a big push over the next year or so.”
It’s a good thing, says Olivier Thierry, chief revenue officer for restaurant-tech provider HungerRush. “Burger King is realizing that they have to digitally transform their operations; that’s clear,” he says. “They have to build out a tech stack that brings them into the 21st century.”
At Domino’s, Doyle’s challenge with technology was more about ensuring the chain could become a leader in the digital ordering and fulfillment methods that were just becoming available, especially mobile apps. Domino’s lunged into the online future with hundreds of new tech employees and a flurry of moves to revolutionize customer convenience in ordering pizza and tracking its delivery, and its success in that arena was probably the biggest factor in overtaking Pizza Hut near the end of Doyle’s tenure in 2018.
“It was a big revolution, because Domino’s hadn’t taken technology seriously prior to 2009,” says Aaron Nilsson, chief information officer of Jet’s Pizza, a regional chain based in Sterling Heights, Michigan, who was global in-store technology manager for Domino’s for about three years under Doyle. “It was a giant team effort. But the key thing he did is to take technology in-house and recognize it as a strategic thing and make sure the finances were there to make it happen.”