Burger King is sprinting toward $300,000 in per-unit profitability for franchisees, and it’s thanks to more than $2 billion worth of investments to get back on track. 

That breaks out to $400 million from the “Reclaim the Flame” turnaround plan announced in September 2022, the $1 billion acquisition of its largest franchisee Carrols Restaurant Group, a $500 million remodel commitment for those Carrols stores, and an additional $300 million co-investment in remodels to get the chain between 85–90 percent modern by 2028. Burger King will also see billions of dollars of accelerated investments from franchisees. 

Average profitability per restaurant increased nearly 50 percent in 2023, moving from $140,000 to more than $205,000.

“Between our Reclaim the Flame investment, pending Carrol’s acquisition, and this additional $300 million investment into remodels, we believe the brand is now fully funded to deliver against our long-term plans for Burger King,” RBI chairman Patrick Doyle told investors during the company’s Q1 earnings call. 

Burger King is projected to complete nearly 400 remodels in 2024 via its Royal Reset program and its normal course of re-imaging. Currently, nearly 100 Royal Reset remodels have been open for at least six months, and these stores are seeing average uplifts in the high teens. The chain completed 264 remodels in 2023, a third of which weren’t part of the Royal Reset framework. Burger King exited the year with 46 percent of restaurants having the modern image.

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The chain is hoping most stores transform into the Sizzle prototype, which has been testing for the past few quarters in Miami, Las Vegas, New Jersey, Northern California, and Asheville, North Carolina. Soon, it will be available to all franchisees. The new design includes kiosks, in-store mobile order and pickup, and mobile order and pickup at the drive-thru. 

CEO Josh Kobza said the remodels are more in-depth than what Burger King has done over the prior 10 years. 

“The other thing that I’m really excited about that you haven’t really seen in the numbers yet, but I think you will over the next three years, is the impact of this Sizzle image in all of the elements of that and how they come together,” Kobza said. “The remodels we’ve been talking about are more in our prior Garden Grill image. And so you’re just starting to see some of those Sizzles. They look awesome during the day, and they look, I think, even better at night perhaps. They’re really beautiful. But importantly, they incorporate a lot of new digital elements and a new guest flow. So they’ve all built intentionally to have a nice interior flow with all kiosks and to have beautiful drive-thru and really great layouts in the kitchen.”

Remodels will cost between $500,000 to $1 million on average, depending on the scope. 

“If you just play through the numbers that we rolled out, you’re looking at about $250 million of that coming from us,” Doyle said. “And if we get a lift in the double digits as we have seen to date, our return on that is healthy and the franchisees’ return on that is healthy. So overall, if we’ve still got half of our system to get remodeled and we can see double-digit lifts, mid-teens lifts on those remodels, and you average that out over half of our system, that’s a pretty nice lift to the overall average unit and does really good things for the profitability of those units. So we feel very good about the return for the franchisees and for us.”

Burger King U.S. same-store sales grew 3.9 percent and traffic was relatively flat. These results were driven by continued progress across all pillars of the Reclaim the Flame plan, including a marketing focus on core equities, namely the Whopper, and strong value messaging, like the $5 Duos, which allowed guests to choose two items (Whopper, Big Fish, Original Chicken Sandwich, or Chicken Fries) for $5. 

The chain finished Q1 with 6,771 U.S. stores, which is a drop of 193 locations year-over-year. CEO Josh Kobza said he doesn’t expect another big batch of closures in Burger King’s domestic segment. Burger King had 12,235 international stores, an increase from 11,594 a year ago. 

Elsewhere under RBI’s umbrella, Popeyes U.S. same-store sales grew 6.2 percent in the quarter. The introduction of the honey lemon pepper wing flavor as a digital exclusive helped deliver a digital mix of 27 percent. The chain layered this promotion with a big box value deal, and both represented key drivers in traffic and chicken quick-service share growth. Also, Popeyes began rolling out streamlined kitchens in California; the conversions can be completed in a few nights with no restaurant downtime during the day. Popeyes ended Q1 with 3,065 restaurants in the U.S. and 1,213 internationally. 

Tim Hortons Canada saw comps lift 7.5 percent, including mid-single-digit traffic growth. The figures were fueled by operational and digital improvements and a strong marketing calendar that featured the January launch of Retro Donuts and Omelette Bites. Average drive-thru times improved 8 percent year-over-year to 33 seconds thanks to the brand’s QR code, scan, and pay tool. Tim Hortons Canada had 3,872 stores at the end of Q1. The coffee chain also had 1,313 units internationally. 

Firehouse Subs saw flat same-store sales in the U.S. The sandwich chain is in the process of developing a multi-year pipeline with incentives. Firehouse saw traction in Q1 with commitments from new and existing franchisees, including first responders. Additionally, U.S. digital sales mix grew to more than 40 percent, which is the highest home market penetration across all of RBI’s brands. Firehouse finished Q1 with 1,203 stores in the U.S. and 19 internationally.