Over the next two years, Burger King looks to inject $2 million in restaurant renovations and advertising as part of a plan to boost sagging U.S. sales.
There will also be updates to the chain’s American cuisine.
U.S. franchisees are part of the strategy and have backed the plan.
Restaurant Brands International Inc. (NYSE:QSR), (Burger King Co)
Restaurant Brands International Inc. (NYSE:QSR) subsidiary Burger King Co. announced on Friday that it will spend $400 million over the next two years on its “Reclaim the Flame” campaign, which aims to spur sales growth and boost franchisee earnings. In addition to $250 million in digital investments, the plan calls for $150 million in advertising and $250 million for restaurant technology, cooking equipment, building upgrades, remodels, and relocations.
About $200 million will be allocated to refurbish about 800 locations. An additional $50 million will be used to upgrade around 3,000 restaurants with technology, culinary equipment, and building upgrades. Over 7,000 Burger King restaurants are operated by the firm across the country.
Burger King reports that, historically, restaurants that have undergone renovations perform better over time than older establishments, with an average 12% rise in revenue within the first year. Even while it might take longer to see results, the company anticipates that being more strategic and selective with its projects would result in an increase in revenue that is even stronger.
Future Forecast
This investment is anticipated by the fast-food burger company to result in a 10 to 20-cent decline in adjusted earnings per share in 2023 and 2024. Burger King said in a statement that it is “refreshing and modernizing its brand, providing meaning and relevance to historical brand anchors like “Flame Grilling’ and “Have it Your Way,’ while also introducing new brand aspects to extend its appeal to a younger and more diverse group of guests. While the S&P 500 SPX, +1.53% has increased 1.2% over the past three months, Restaurant Brands’ stock has skyrocketed 18.7% during the afternoon session, rising 0.8%.
Burger King reports that historically, restaurants that have undergone renovations perform better over time than older establishments, with an average 12% rise in revenue within the first year. Even while it might take longer to see results, the company anticipates that being more strategic and selective with its projects would result in an increase in revenue that is even stronger. It is expected that the decision will definitely factor into stock trading over the coming months.
Featured Image- Megapixl @Zehrabasak
Author Jowi Kwasu 
