Burger King Plans Mass Closure of Stores: 'Reclaim the Flame'
Burger King will close up to 400 restaurants this year, with locations that are not making high enough profit likely to be on the chopping block.
Burger King closed 124 U.S. locations in the first three months of the year and now has about 7,000 restaurants in America, parent company, Restaurant Brands International, said, according to the New York Post.
The company usually closes “a couple hundred” locations per year.
RBI chairman Patrick Doyle explained that stores that are not making sales goals are going to fade away, according to The Sun.
“There will always be a minority who aren’t dedicated enthusiastic operators, and that’s OK,” Doyle said last week during the company’s earnings call.
“We’ll work with them to leave the system and move on to do something else. There simply is no room for franchisees who are not willing or able to work hard to operate restaurants that are better than the system average over the long term,” he said.
In September Burger King rolled out a plan called “Reclaim the Flame” that included investment in advertising, restaurant technology, kitchen equipment and remodeled buildings.
The first quarter showed that the plan could be working with an 8.7 percent increase in Burger King’s U.S. sales over the same period in 2022, according to Food Business News.
“Traffic was modestly negative for the quarter, and we are very focused on moving the traffic to the positive category over the course of the year,” CEO Joshua Kobza said during the call.
“I think what’s encouraging to us is that we are seeing sequential improvements. The traffic was more negative in Q4 and got a little bit better in Q1. And we’re seeing a stabilization in sort of our monthly traffic levels, which is very encouraging to us. I think the team is highly focused on growing traffic as we move through the remainder of this year.”
In good news for customers, he said he expects “some moderation in pricing increases.”
Kobza said that there could be turnover in franchise operators, noting that successful operators may be given a crack at stores operated by those who have been less successful.
Burger King’s worldwide business has a 12.3 percent increase in sales, Kobza said.
Are you keeping count of the many AMERICAN stores closing in this country? Looks like something on purpose https://t.co/Ouz4gHE2pp
— 🫵🏾 Wayne DuPree (@WayneDupreeShow) May 6, 2023
“This quarter, we saw a good performance in some of our largest markets like France, Germany, Spain and Australia, as well as some sales recovery in China following the easing of COVID restrictions. Digital ordering has fundamentally changed the business over the years and will continue to be a major driver of growth for the next several years,” he said.
About 90 Burger King restaurants had been under a cloud after Toms King Holdings filed for Chapter 11, according to Restaurant Business Online.
About 82 of those will be under new operators in a series of deals worth $33 million.
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