In September 2022, Burger King owner Restaurant Brands International announced the chain’s $400 million Reclaim the Flame plan. Now the No. 3 burger chain behind McDonald’s and Wendy’s, Burger King is pouring $150 million into advertising and digital investments to “Fuel the Flame” and $250 million toward a “Royal Reset” involving restaurant technology, equipment and remodels, and relocations. In connection with the big revamp, the company also hired two former Domino’s executives: Tom Curtis, Burger King U.S. president, and Patrick Doyle, executive chair of RBI. Wendy’s snatched the No. 2 spot from the chain in 2021 after years of declining sales due to complex menu items, outdated restaurants and slow operations. BK profits fell about 20% from 2019 through 2022. It remains to be seen if the overhaul will be enough to put the mother of the Whopper back into the burger supremacy race.

Chapters: 
00:00 — Introduction 
01:34 — Reclaim the Flame 
05:01 — History 
08:03 — Restaurant Brands International 
11:37 — Will $400M save BK? 

Produced, Shot and Edited by: Darren Geeter
Senior Managing Producer: Tala Hadavi
Additional Camera: Natalie Rice, Juliana Broste
Animation: Jason Reginato, Alexander Wood, Christina Locopo

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#CNBC

Can Burger King Make A Comeback?

With its almost 20,000 global chains, Burger King has been a major force in the fast food industry for nearly 70 years.

BK represents a dominant $25.5 billion of its parent company, RBI's, nearly $40 billion in total sales in 2022.

Since going public in 2014, share prices for RBI jumped from nearly $40 a share to over $76 a share in June 2023.

But as of late, Burger King has dropped in its standings against rivals, slumping sales come from complex menu items, outdated restaurants and slow operations.

While still the third largest burger chain, BK ranks seventh in the fast food category behind McDonald's, Chick-fil-A, Taco Bell and Wendy's in 2022.

Wendy's most recently overtook Burger King in 2020 after it launched breakfast.

Earnings for Burger King have seen sales growth flatten, franchises filing for bankruptcies and a new leadership overhaul.

Like any business that's been around for 7 decades, you'll have some up and some down.

That's that's part of the normal course of business.

And we did have a few of those over the last few years.

But in 2022, the company announced its biggest shakeup yet.

Burger King announcing a $400 million investment in revitalizing stores, advertising and digital in an effort to try and accelerate growth.

It's really a 360 degree plan they're pursuing here with the management team prioritizing operations, prioritizing brand management, things that are just broadly neglected between 2018 and 2021.

So the question now, can $400 million and a couple of Domino's executives bring back Burger King to its former heights?

In September 2022, 1 of the biggest quick service restaurant brands in the world, Restaurant Brands International, announced its Reclaim the Flame plan to revamp the North American Burger King chains.

Investors started getting concerned about sales slipping around late 2020, early 2021.

You were also hearing the restaurant brands executives talk about it openly on the analyst calls.

Fresh leadership is at the top of BK's new initiative.

Patrick Doyle and Tom Curtis, 2 former Domino's executives that launched the pizza chain's turnaround to take the number 1 pizza spot in the world.

Some of the great things that happened at Domino's were in recent history from 2010 to 2020, the brand engineered an amazing turnaround.

And we always had an objective there of something great, but what was really great was the journey, not actually the destination.

And that's part of the reason why I came to Burger King.

Curtis's colleague, Patrick Doyle, invested about $30 million of his own money into the plan.

Patrick is very much like a franchisee now.

He has his own capital invested in RBI and he absolutely wants to make it successful and make sure it's successful, not only just so he's been recognized as done a good job, but also because he's heavily invested in it and his livelihood's there too.

The $400 million will be dedicated to all North American businesses in 3 categories.

$250 million to remodel about 800 locations and about $150 million into advertising and digital investments.

Closing about 400 underperforming stores.

This is a seminal moment in time for us to figure out which restaurants have long term viability.

And we need to take those off for owners back so that they don't have to bear the losses and can put that money back into growing their asset base and their restaurants that they do own.

We are seeing a heightened amount of closures this year.

That's gonna really help set the foundation for net restaurant growth to get better, you know, fewer closures in 2024.

In 2022, profits at Burger King stores were down nearly 20 percent from 2018.

Their store level cash flow was about $140,000 in 2022.

So 20 percent below the 2018 levels will take a couple will take we think in 2024 they will get there if not by the end of this year, just given the success that they're seeing.

And longer term, you know, that's obviously a level they need to improve to remain competitive with brands like Taco Bell, McDonald's, that's the higher store level cash flow.

2 of the largest franchisees filed for bankruptcy in 2023.

Meridian Restaurants Unlimited with 118 locations and Tom's King with about 90 locations.

The rising cost of labor and food, I think, hit a lot of those franchisers at the worst possible time.

So maybe they're down 10 percent in traffic, but the cost of food and labor has gone up 15 percent.

So that sort of really, I think, pinched a lot of those franchisers.

You think about the investment that RBI has made, it gives franchisees the opportunity to invest in their facilities, invest in new equipment, invest in their people.

The $400 million investment looks to combat slipping balance sheets.

But how did the mothership of the iconic Whopper even get here in the first place?

Burger King got its start in 1954 as Insta Burger King, a nod to the short wait times.

By 1957, the chain launched its signature 37-cent Whopper burger and franchises began popping up everywhere.

Insta Burger King was renamed to simply Burger King.

They've been pushing the Whoppers since it came out.

And for good reason, it is their like a main driver of their sales.

And in terms of consumer sentiment, scores usually ranks near the top of fast food burgers.

Competition amongst burger chains was heating up by the late 1960s.

McDonald's, Jack in the Box, White Castle and Wendy's were all expanding and improving their business models.

At this time, McDonald's introduced the forever Whopper rival, the Big Mac.

So Burger King was sort of taken that second spot for years and almost throughout a lot of its history with Wendy's usually right below.

So McDonald's, a huge gap and then Burger King and Wendy's.

In 1967, Pillsbury acquired Burger King, setting the company and its brand from a relatively small operation to a subsidiary of a larger food conglomerate.

It launched about 100 stores a year starting in 1968.

That takeover catapulted the company into a chain reaction of ownership, mergers and acquisitions from Pillsbury to Grand Metropolitan PLC to Guinness PLC.

And by 2002, it was acquired by TPG Capital.

During that era of changing hands, competition was slowly taking over Burger King.

At the time, it was still the number 2 burger chain behind McDonald's.

As more and more chains have been offered and consumer habits have changed a little bit, McDonald's has far and away maintained that top spot.

But a lot of the other brands below Burger King have started to compete a lot more closely.

In 2003, just 1 year after being acquired by TPG Capital, revenues hit $1.7 billion, but a net loss of $868 million.

The subsequent years before going public in 2006, Burger King saw incremental revenue gains.

But from 2006 to 2010, Sam's store sales growth were uneven.

Demand for Burger King significantly dropped as investor sentiment was wavering on Wall Street.

TPG and during those times, it was kind of a dark time for the brand.

And when the 3G people came onto the scene, it was definitely a breath of fresh air.

After years of turbulent same-store sales, the burger chain was spun off again.

This time, it was taken private by 3G Capital for roughly $3.26 billion, approximately $24 a share.

Burger King has been challenged a lot in the last decade or so.

It's had, you know, a couple of moments where menu items have done well or marketing promotions have really taken off.

But that hasn't helped the overall business keep growing.

And, you know, at a certain point, then those gains fade away.

And it's just, you know, back to being Burger King.

In 2014, there would be another transaction hoping to revitalize the brand.

A merger between Burger King and Tim Hortons worth an estimated $11.5 billion.

The merger between Burger King and Tim Hortons formed Restaurant Brands International in 2014.

It made RBI the third largest quick service company in the world with combined same source sales of $23 billion.

Going back to 2014, we started to think about what other brands or what other segments of the quick service restaurant industry we might want to be involved in.

And 1 of the really exciting segments is certainly breakfast and coffee.

That's a really exciting segment has great growth characteristics all around the world.

And as we learned more about it, we discovered it was an incredible business, incredible brand, something that I really haven't seen almost anywhere else around the world.

Under the RBI umbrella, Burger King saw rapid expansion the first 5 years.

Over 3,400 stores were open during that time and revenue and shares were also rising.

Revenues took a hit in 2017, then bounced back the following year.

Initially, RBI's portfolio consisted of Burger King and Tim Hortons.

Today, the company has expanded to a diverse lineup of quick service restaurants.

I think 1 of the greatest things that we've been able to do with the brands that we've acquired is to make them more global brands.

So we took Burger King, which was more focused in the U.S.

And it's now much, much larger than it was when we acquired it.

But also we've started to do that with some of the new brands.

So Tim Hortons, which only had 1 international market is now in dozens of countries around the world And Popeyes is the same.

So we've really been able to take a lot of these brands and make them truly global brands.

RBI's portfolio straddles a couple of different segments.

You have burgers, coffee, fried chicken and now salp sandwiches.

And then Burger King is like the most well-established brand, I would say, in terms of the U.S.

Right before the pandemic, Burger King accounted for nearly 70 percent of RBI's worldwide restaurants.

But as the pandemic issued stay-at-home orders, BK's domestic chains took a significant hit.

In fiscal year 2020, Burger King saw same store sales drop nearly 8%.

The company also saw a 28% uptick in drive-thru attendance.

But wait times and menu options became a blind spot as some food offerings were complex to assemble and single lane drive-thrus cause congestion and longer wait times.

Burger King coming off of a number of years of record sales and record profits, I think we lost our way a little bit.

And when We came together as a team last year recognizing what had been lost.

I feel that it was a loss of focus, a loss of focus on who we are, what we do exceptionally well that makes us unique.

He's the founder and president of Raxin Restaurants.

We started in Connecticut with 6 restaurants and since we've grown to 65 restaurants operating in 7 states.

For franchisees, the effects of the pandemic wore on, signaling tighter margins for franchisees and lower profitability at chains.

We've seen a couple of franchisee bankruptcies already this year, which is obviously not great for either the brand or its footprint.

The bankruptcy situations are just the process of getting restaurants into the right hands, the right franchisees with the right resources that can do what's necessary to turn the brand around.

And so in the short term, It's necessary just to go through the process to get those restaurants from the hands of 1 person into the hands of another person.

While Burger King is closing down some 400 chains across the U.S., RBI plans to continue its expansion abroad.

They're also looking to continue to expand internationally.

But again, that's mostly through the opening of outlets versus in the US, they're having the opposite approach.

If you go back to 2010, we had about 5,000 restaurants outside of the US and now we have more than 10,000.

So we have really been able to grow tremendously around the world.

Generally, in the international business, we work with a master franchise model where we'll have 1 partner that runs each of the countries.

So we'll have a partner for Burger King in India or Spain or Mexico or Brazil.

And a lot of those businesses have been really successful.

Relatively flat same-store sales caused a concern and spark a needed revamp for the U.S.

Chains, even though international chains continue to perform well for RBI.

Overall, Burger King's numbers look great.

It would just be when you looked at the domestic numbers versus the international numbers, there was a very clear, stark difference, especially as, you know, lockdowns were easing and stores were reopening.

Burger competitors, and its international stores weren't having the same problem.

You know, the international restaurants were bouncing back much faster.

So it's kind of like, well, what's going on here?

In September 2022, Burger King, in collaboration with the majority of its franchisees, announced the Reclaim the Flame initiative.

I think what makes the Reclaim the Flame plan special and have an outsized chance of success is that it wasn't built by corporate.

It was built by a corporate team with franchisees.

New marketing, reinvestment into the restaurants, retraining our restaurant general managers who are the most important people in our businesses, our leaders, And it took a lot of time.

It was month after month of folks like me flying down to Miami to sit in a room with the leadership team at Burger King for days at a time to work through the plan, develop the plan.

The $400 million investment was split into 3 categories of remodeling, advertising and digital investments.

To date, even though we've already had a ton of progress, we've only deployed a small portion of that capital.

So on the marketing front, we put in $20 million so far.

And on the Royal Reset short term, which is an investment back in technology for the restaurants, their day to day business, we've only done a portion of that as well.

And the remodels are really just starting.

Campaigns like the Whopper song that went viral on TikTok and streamed nearly 5000000 times on Spotify was 1 of the biggest successes of the investment spending.

President at Burger King, told me that they are set.

They sold more Whoppers than they ever had previously in the last quarter.

And he credited a lot of that to the viral ad campaign they had with the Whopper song.

I think there's also just been a lot more focus on the Whopper generally as a part of Burger King's menu, less so limited time menu items, all these other things that can kind of crowd up its menu, even if, you know, the Burger King customer is just coming by for a Whopper.

The Whopper presents a substantial opportunity as a canvas for future menu innovation that they're going to be pursuing.

And then in 2024, I think you're to see some more some more things coming.

As for franchisees, Burger King chains are looking for a facelift as remodeling efforts are soon on the way.

RBI's first quarter earnings in May 2023 revealed more than 120 stores were shut down and revenue growth and same store sales increased by about 1%.

Since its positive signs during Q1 earnings, shares for RBI has continued to climb, reaching nearly its all-time high set in September 2019 of over $78 a share to over $76 a share in June 2023.

Investors appreciate the fact that RBI is coming to the table to invest money into the brand to see its resurgence.

And I think ultimately the proof will be in the pudding.

The first quarter of 2023 was even better.

Those 2 quarters I think are gonna be great indicators that we're investing in the right way and in the right place.

And having our franchisees alongside us also investing their hard earned funds is amplifying that RBI investment.

Consumers are shifting away from the discounted offerings to more full price, full margin offerings in combination with some menu price as well.

But that's really helping them to really improve profitability at a very earnest clip.

The biggest thing that investors are looking at is Burger King U.S.

That's going to be the key top line metric here around how the sales performance is performing at mature stores.

Given the work they're doing behind the curtain, really around improving franchisee profitability, we think that we're going to see a much better trajectory with fewer franchisee bankruptcies going forward, less store closures in 2024 versus

Investors are eager to see if the Reclaim the Flame initiative can help Burger King make its much needed comeback and regain its position as 1 of the top fast food chains in the U.S.

I come away with a sense that there's so many opportunities for us to grow.

We have opportunities to do much better with the Burger King business in the U.S.

And we're putting a lot of money behind it and starting to work.

But we have opportunities all around the world as well.

Analysts are kind of holding out to see what the turnaround actually looks like, if this is just a temporary blip that they've seen in uplift in sales, or if this is something that they're going to be long-term be able to hold on to.

Because I think there's just generally a little bit of skepticism about the Burger King US brand.


Speaker 0: With its almost 20,000 global chains, Burger King has been a major force in the fast food industry for nearly 70 years. BK represents a dominant $25.5 billion of its parent company, RBI's, nearly $40 billion in total sales in 2022. Since going public in 2014, share prices for RBI jumped from nearly $40 a share to over $76 a share in June 2023. But as of late, Burger King has dropped in its standings against rivals, slumping sales come from complex menu items, outdated restaurants and slow operations. While still the third largest burger chain, BK ranks seventh in the fast food category behind McDonald's, Chick-fil-A, Taco Bell and Wendy's in 2022.

Speaker 1: Wendy's most recently overtook Burger King in 2020 after it launched breakfast.

Speaker 0: Earnings for Burger King have seen sales growth flatten, franchises filing for bankruptcies and a new leadership overhaul.

Speaker 2: Like any business that's been around for 7 decades, you'll have some up and some down. That's that's part of the normal course of business. And we did have a few of those over the last few years.

Speaker 0: But in 2022, the company announced its biggest shakeup yet.

Speaker 3: Burger King announcing a $400 million investment in revitalizing stores, advertising and digital in an effort to try and accelerate growth.

Speaker 4: It's really a 360 degree plan they're pursuing here with the management team prioritizing operations, prioritizing brand management, things that are just broadly neglected between 2018 and 2021.

Speaker 0: So the question now, can $400 million and a couple of Domino's executives bring back Burger King to its former heights? Or is it too late? In September 2022, 1 of the biggest quick service restaurant brands in the world, Restaurant Brands International, announced its Reclaim the Flame plan to revamp the North American Burger King chains.

Speaker 1: Investors started getting concerned about sales slipping around late 2020, early 2021. You were also hearing the restaurant brands executives talk about it openly on the analyst calls.

Speaker 0: Fresh leadership is at the top of BK's new initiative. Patrick Doyle and Tom Curtis, 2 former Domino's executives that launched the pizza chain's turnaround to take the number 1 pizza spot in the world.

Speaker 5: Some of the great things that happened at Domino's were in recent history from 2010 to 2020, the brand engineered an amazing turnaround. And we always had an objective there of something great, but what was really great was the journey, not actually the destination. And that's part of the reason why I came to Burger King.

Speaker 0: Curtis's colleague, Patrick Doyle, invested about $30 million of his own money into the plan.

Speaker 5: Patrick is very much like a franchisee now. He has his own capital invested in RBI and he absolutely wants to make it successful and make sure it's successful, not only just so he's been recognized as done a good job, but also because he's heavily invested in it and his livelihood's there too.

Speaker 0: The $400 million will be dedicated to all North American businesses in 3 categories. $250 million to remodel about 800 locations and about $150 million into advertising and digital investments. Another part of that plan? Closing about 400 underperforming stores.

Speaker 5: This is a seminal moment in time for us to figure out which restaurants have long term viability. There's a few out there that don't. And we need to take those off for owners back so that they don't have to bear the losses and can put that money back into growing their asset base and their restaurants that they do own.

Speaker 4: We are seeing a heightened amount of closures this year. That's gonna really help set the foundation for net restaurant growth to get better, you know, fewer closures in 2024.

Speaker 0: In 2022, profits at Burger King stores were down nearly 20 percent from 2018.

Speaker 4: Their store level cash flow was about $140,000 in 2022. That compares to 2018's $175,000. So 20 percent below the 2018 levels will take a couple will take we think in 2024 they will get there if not by the end of this year, just given the success that they're seeing. And longer term, you know, that's obviously a level they need to improve to remain competitive with brands like Taco Bell, McDonald's, that's the higher store level cash flow.

Speaker 0: 2 of the largest franchisees filed for bankruptcy in 2023. Meridian Restaurants Unlimited with 118 locations and Tom's King with about 90 locations.

Speaker 6: The rising cost of labor and food, I think, hit a lot of those franchisers at the worst possible time. So maybe they're down 10 percent in traffic, but the cost of food and labor has gone up 15 percent. So that sort of really, I think, pinched a lot of those franchisers.

Speaker 7: You think about the investment that RBI has made, it gives franchisees the opportunity to invest in their facilities, invest in new equipment, invest in their people.

Speaker 0: The $400 million investment looks to combat slipping balance sheets. But how did the mothership of the iconic Whopper even get here in the first place? Burger King got its start in 1954 as Insta Burger King, a nod to the short wait times. By 1957, the chain launched its signature 37-cent Whopper burger and franchises began popping up everywhere. Insta Burger King was renamed to simply Burger King.

Speaker 6: They've been pushing the Whoppers since it came out. And for good reason, it is their like a main driver of their sales. And in terms of consumer sentiment, scores usually ranks near the top of fast food burgers.

Speaker 0: Competition amongst burger chains was heating up by the late 1960s. McDonald's, Jack in the Box, White Castle and Wendy's were all expanding and improving their business models. At this time, McDonald's introduced the forever Whopper rival, the Big Mac.

Speaker 6: So Burger King was sort of taken that second spot for years and almost throughout a lot of its history with Wendy's usually right below. So McDonald's, a huge gap and then Burger King and Wendy's.

Speaker 0: In 1967, Pillsbury acquired Burger King, setting the company and its brand from a relatively small operation to a subsidiary of a larger food conglomerate. It launched about 100 stores a year starting in 1968. That takeover catapulted the company into a chain reaction of ownership, mergers and acquisitions from Pillsbury to Grand Metropolitan PLC to Guinness PLC. And by 2002, it was acquired by TPG Capital. During that era of changing hands, competition was slowly taking over Burger King.

At the time, it was still the number 2 burger chain behind McDonald's.

Speaker 6: As more and more chains have been offered and consumer habits have changed a little bit, McDonald's has far and away maintained that top spot. But a lot of the other brands below Burger King have started to compete a lot more closely.

Speaker 0: In 2003, just 1 year after being acquired by TPG Capital, revenues hit $1.7 billion, but a net loss of $868 million. The subsequent years before going public in 2006, Burger King saw incremental revenue gains. But from 2006 to 2010, Sam's store sales growth were uneven. Demand for Burger King significantly dropped as investor sentiment was wavering on Wall Street.

Speaker 6: TPG and during those times, it was kind of a dark time for the brand. And when the 3G people came onto the scene, it was definitely a breath of fresh air.

Speaker 0: After years of turbulent same-store sales, the burger chain was spun off again. This time, it was taken private by 3G Capital for roughly $3.26 billion, approximately $24 a share.

Speaker 1: Burger King has been challenged a lot in the last decade or so. It's had, you know, a couple of moments where menu items have done well or marketing promotions have really taken off. But that hasn't helped the overall business keep growing. And, you know, at a certain point, then those gains fade away. And it's just, you know, back to being Burger King.

Speaker 0: In 2014, there would be another transaction hoping to revitalize the brand. A merger between Burger King and Tim Hortons worth an estimated $11.5 billion. The merger between Burger King and Tim Hortons formed Restaurant Brands International in 2014. It made RBI the third largest quick service company in the world with combined same source sales of $23 billion.

Speaker 2: Going back to 2014, we started to think about what other brands or what other segments of the quick service restaurant industry we might want to be involved in. And 1 of the really exciting segments is certainly breakfast and coffee. That's a really exciting segment has great growth characteristics all around the world. And we came upon Tim Hortons. And as we learned more about it, we discovered it was an incredible business, incredible brand, something that I really haven't seen almost anywhere else around the world.

Speaker 0: Under the RBI umbrella, Burger King saw rapid expansion the first 5 years. Over 3,400 stores were open during that time and revenue and shares were also rising. Revenues took a hit in 2017, then bounced back the following year. Initially, RBI's portfolio consisted of Burger King and Tim Hortons. Today, the company has expanded to a diverse lineup of quick service restaurants.

Speaker 2: I think 1 of the greatest things that we've been able to do with the brands that we've acquired is to make them more global brands. So we took Burger King, which was more focused in the U.S. And we grew it all around the world. And it's now much, much larger than it was when we acquired it. But also we've started to do that with some of the new brands.

So Tim Hortons, which only had 1 international market is now in dozens of countries around the world And Popeyes is the same. So we've really been able to take a lot of these brands and make them truly global brands.

Speaker 1: RBI's portfolio straddles a couple of different segments. You have burgers, coffee, fried chicken and now salp sandwiches. And then Burger King is like the most well-established brand, I would say, in terms of the U.S. And internationally.

Speaker 0: Right before the pandemic, Burger King accounted for nearly 70 percent of RBI's worldwide restaurants. But as the pandemic issued stay-at-home orders, BK's domestic chains took a significant hit. In fiscal year 2020, Burger King saw same store sales drop nearly 8%. The company also saw a 28% uptick in drive-thru attendance. But wait times and menu options became a blind spot as some food offerings were complex to assemble and single lane drive-thrus cause congestion and longer wait times.

Speaker 7: Burger King coming off of a number of years of record sales and record profits, I think we lost our way a little bit. And when We came together as a team last year recognizing what had been lost. I feel that it was a loss of focus, a loss of focus on who we are, what we do exceptionally well that makes us unique.

Speaker 0: This is Chris Johnson. He's the founder and president of Raxin Restaurants.

Speaker 7: I founded Raxin back in 2013. We started in Connecticut with 6 restaurants and since we've grown to 65 restaurants operating in 7 states.

Speaker 0: For franchisees, the effects of the pandemic wore on, signaling tighter margins for franchisees and lower profitability at chains.

Speaker 1: We've seen a couple of franchisee bankruptcies already this year, which is obviously not great for either the brand or its footprint.

Speaker 7: The bankruptcy situations are just the process of getting restaurants into the right hands, the right franchisees with the right resources that can do what's necessary to turn the brand around. And so in the short term, It's necessary just to go through the process to get those restaurants from the hands of 1 person into the hands of another person.

Speaker 0: While Burger King is closing down some 400 chains across the U.S., RBI plans to continue its expansion abroad.

Speaker 6: They're also looking to continue to expand internationally. But again, that's mostly through the opening of outlets versus in the US, they're having the opposite approach.

Speaker 2: If you go back to 2010, we had about 5,000 restaurants outside of the US and now we have more than 10,000. So we have really been able to grow tremendously around the world. Generally, in the international business, we work with a master franchise model where we'll have 1 partner that runs each of the countries. So we'll have a partner for Burger King in India or Spain or Mexico or Brazil. And a lot of those businesses have been really successful.

Speaker 0: Relatively flat same-store sales caused a concern and spark a needed revamp for the U.S. Chains, even though international chains continue to perform well for RBI.

Speaker 1: Overall, Burger King's numbers look great. It would just be when you looked at the domestic numbers versus the international numbers, there was a very clear, stark difference, especially as, you know, lockdowns were easing and stores were reopening. You started to see Burger King U.S. Fall behind other U.S. Burger competitors, and its international stores weren't having the same problem.

You know, the international restaurants were bouncing back much faster. So it's kind of like, well, what's going on here?

Speaker 0: In September 2022, Burger King, in collaboration with the majority of its franchisees, announced the Reclaim the Flame initiative.

Speaker 5: I think what makes the Reclaim the Flame plan special and have an outsized chance of success is that it wasn't built by corporate. It was built by a corporate team with franchisees.

Speaker 7: New marketing, reinvestment into the restaurants, retraining our restaurant general managers who are the most important people in our businesses, our leaders, And it took a lot of time. It was a lot of dialogue. It was month after month of folks like me flying down to Miami to sit in a room with the leadership team at Burger King for days at a time to work through the plan, develop the plan.

Speaker 0: The $400 million investment was split into 3 categories of remodeling, advertising and digital investments.

Speaker 5: To date, even though we've already had a ton of progress, we've only deployed a small portion of that capital. So on the marketing front, we put in $20 million so far. And on the Royal Reset short term, which is an investment back in technology for the restaurants, their day to day business, we've only done a portion of that as well. And the remodels are really just starting.

Speaker 0: Campaigns like the Whopper song that went viral on TikTok and streamed nearly 5000000 times on Spotify was 1 of the biggest successes of the investment spending.

Speaker 1: Tom Curtis, the U.S. President at Burger King, told me that they are set. They sold more Whoppers than they ever had previously in the last quarter. And he credited a lot of that to the viral ad campaign they had with the Whopper song. I think there's also just been a lot more focus on the Whopper generally as a part of Burger King's menu, less so limited time menu items, all these other things that can kind of crowd up its menu, even if, you know, the Burger King customer is just coming by for a Whopper.

Speaker 4: The Whopper presents a substantial opportunity as a canvas for future menu innovation that they're going to be pursuing. And then in 2024, I think you're to see some more some more things coming.

Speaker 0: As for franchisees, Burger King chains are looking for a facelift as remodeling efforts are soon on the way. RBI's first quarter earnings in May 2023 revealed more than 120 stores were shut down and revenue growth and same store sales increased by about 1%. Since its positive signs during Q1 earnings, shares for RBI has continued to climb, reaching nearly its all-time high set in September 2019 of over $78 a share to over $76 a share in June 2023.

Speaker 5: Investors appreciate the fact that RBI is coming to the table to invest money into the brand to see its resurgence. And I think ultimately the proof will be in the pudding. The fourth quarter was good. The first quarter of 2023 was even better. Those 2 quarters I think are gonna be great indicators that we're investing in the right way and in the right place.

And having our franchisees alongside us also investing their hard earned funds is amplifying that RBI investment.

Speaker 4: Consumers are shifting away from the discounted offerings to more full price, full margin offerings in combination with some menu price as well. But that's really helping them to really improve profitability at a very earnest clip. The biggest thing that investors are looking at is Burger King U.S. Same store sales. That's going to be the key top line metric here around how the sales performance is performing at mature stores.

Given the work they're doing behind the curtain, really around improving franchisee profitability, we think that we're going to see a much better trajectory with fewer franchisee bankruptcies going forward, less store closures in 2024 versus

Speaker 0: 2023. Investors are eager to see if the Reclaim the Flame initiative can help Burger King make its much needed comeback and regain its position as 1 of the top fast food chains in the U.S.

Speaker 2: I come away with a sense that there's so many opportunities for us to grow. We have opportunities to do much better with the Burger King business in the U.S. And we're putting a lot of money behind it and starting to work. But we have opportunities all around the world as well.

Speaker 1: Analysts are kind of holding out to see what the turnaround actually looks like, if this is just a temporary blip that they've seen in uplift in sales, or if this is something that they're going to be long-term be able to hold on to. Because I think there's just generally a little bit of skepticism about the Burger King US brand.

Speaker 7: You

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Can Burger King Make A Comeback?