![]() After the initial investment between 20, Burger King will levy an increase in franchisee advertising contributions. The company says franchisees representing 93% of stores have signed up to participate in the Fuel the Flame advertising scheme. In a bet on the success of its efforts, Burger King has tied franchisee contributions to EBITDA improvements. Burger King will support these menu shifts with $120 million in advertising spend, which the company says is a 30% increase in its media buying capacity. RBI is also planning to simplify its menu and kitchen operations, focusing on Burger King’s chicken sandwich offerings and Whopper sandwich. The $30 million RBI has allocated to improve digital offerings will “support our Guests ease of ordering on the Burger King app which includes integrated payment processing, enhancing the Royal Perks loyalty program, the addition of digital personalized offers, and improving the overall convenience of delivery and pick up options,” RBI said in a statement. ![]() RBI is seeking other ways to boost sales as well, including digital sales, which have emerged as a focus for Burger King in recent quarters. “If we are successful in generating sales uplifts consistent with historical experience or better, we expect the program will generate a positive return on our capital and be accretive over time,” the company said in a statement. ![]() Participating franchisees will pay somewhere between 4.5% in royalty rates, or the company’s normal level, and 6%, with franchisee commitment to royalty rate rises determining the degree of financial assistant RBI will provide. The remodel program will be financed in part by increased royalty rates spread over the 20-year lifespan of franchise agreements. RBI said this program was a major departure from previous remodel schemes, which focused on restaurants at the end of their franchise agreement cycles “rather than identifying the highest potential return projects.” Through the program, 3,000 restaurants will receive $50 million alongside matching contributions by franchisees to support the acquisition of new restaurant tech, kitchen equipment and unspecified building upgrades.Īn additional 800 restaurants will receive $200 million to support complete remodels, which the company estimates cost between $500,000 and $1.8 million depending on restaurant location. “The Royal Reset remodel program will deliver 100% of our contribution at the time of remodel completion and provide access to greater levels of funding as compared to past programs,” the company claimed in its announcement. ![]() RBI expects sales improvements from the Royal Reset to be higher because of improved project selection. Previous remodels generated a 12% sales boost on average in the first year at participating locations, before gradually falling to a 2% sales lift versus comparable, unimproved restaurants. RBI’s investment in store overhauls, dubbed the Royal Reset, will target franchisees that meet certain profitability thresholds and demonstrate that a remodel would permanently boost sales, according to company statements. ![]()
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