Burger King Banks on Better Operators, Remodels to Weather Tough Environment

Although Burger King saw a decline in U.S. same-store sales in Q1—as did most in the industry—the chain isn’t hanging its head.

Comps dropped 1.1 percent, but the chain reported that it’s still outperforming the broader QSR burger category, which proves to leadership that its ongoing Reclaim the Flame turnaround plan is working.

A major part of the strategy is improving operations. Burger King just completed franchisee road shows where it found strong willingness from operators to raise standards.

The chain also wants to put its corporate restaurants into the hands of smaller, more capable franchisees. That means high-performing existing operators, new entrants into the system, or internal employees who are ready to take ownership.

“We’re continuing to take steps to transition restaurants into the hands of more engaged operators,” RBI CEO Josh Kobza said during the company’s Q1 earnings call. “And we’re seeing those efforts translate into improvements across key metrics, not just at underperforming stores, but across the system. These improvements, coupled with an ongoing effort to expand hours of operation, are driving better guest experiences and contributing to the outperformance we’ve seen relative to the industry.”

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At the same time, Burger King is remodeling locations to improve unit economics and drive franchisee profitability. It expects to finish 400 remodels this year, including many in the new Sizzle image, which comes with average sales lifts in the mid-teens. The brand is on track to reach 85 percent modern image by the end of 2028.

“You’re starting to see enough of those [remodels] being done on a consistent basis, essentially one a day getting remodeled in the U.S., and I think you’re starting to see execution flow through into results,” said RBI chairman Patrick Doyle. “And I think that’s the big reason you’ve seen relative outperformance from BK in the U.S.”

Kobza agreed with Doyle, but added that much work is left.

“I think we’ve made significant progress on operations, and we started to make progress on remodels. I would say I still think we have a long way to go,” the CEO said. “We still have a lot of remodels to get done. We’ve got a lot of restaurants that aren’t at the modern image. And while we have some pockets of restaurants that have dramatically improved operations and are doing much better than the average there, we still have some pockets of operations that aren’t where we want them to be, that we need to turn around. And so I think those couple of things will continue to be the undercurrents that can drive relative outperformance.”

During the quarter, the brand balanced value offers like $5 Duos and $7 Trios with premium innovation, like the Steakhouse Bacon Whopper (this achieved one of the highest product satisfaction scores to date).

Looking ahead, Burger King plans to launch a family promotion, bring more focus to the Whopper, and offer some refreshes on value.

“We might have new promotions,” Kobza said. “You saw us move from $5 meals to the $5 Duos and $7 Trios. We’ll look to continue to refresh some of those mechanics and bring new ways to talk about it and new offerings to guests.”

Here’s a look at how RBI’s other concepts performed in the first quarter:

Tim Hortons (Canada)

• Comparable sales: 0.1 percent, lapping strong results from last year
• Initiatives & strategies:
  • Continued strong marketing calendar:
    • Freshly cracked scrambled eggs
    • $1 doughnut with coffee promotion
    • Return of physical roll-up cup
    • Improving consumer confidence and sales trends into Q2
  • Operational Wins:
    • Nine consecutive quarters of improved morning drive-thru times
    • Record guest satisfaction in Q1
  • Future plans:
    • Launching new products like scrambled egg breakfast box (with actor Ryan Reynolds) and Hat-Trick Pizza
    • Expanding cold and espresso-based beverages (with new espresso machines coming later this year)
    • Returning to positive net unit growth in 2025, focusing on underpenetrated regions like Western Canada

Popeyes

• U.S. Comparable sales: Declined 4 percent after a strong prior year that was boosted by last year’s Super Bowl ad
• Initiatives & strategies:
  • Continuing “Easy to Love” strategy to improve operations and guest experience
  • Increasing national advertising (starting in April, committed for three years if targets met)
  • Remodeling restaurants for a modern, consistent image by 2030
  • Rolling out “Easy to Run” kitchen upgrades to enhance operations
  • Prioritizing operational consistency over rapid new development
  • Focus on top operators and improving operational standards across the system

Firehouse Subs

• U.S. Comparable sales: 0.6 percent
• Initiatives & strategies:
  • Outperforming broader sub sandwich category in Q1
  • Strong digital sales mix: over 45 percent of sales
  • Popular promotions like French Dip sub and Hot Ones collaboration
  • Significant momentum in store commitments from new and existing franchisees
  • Confidence in accelerating unit growth again in 2025