Burger King Boosts Investment for 85%-90% Modernization in U.S. Restaurants by 2028

Burger King Company LLC, commonly known as Burger King or BK, has announced a significant boost in its investment, allocating an additional $300 million towards the modernization of Burger King® outlets throughout the United States. This substantial infusion of funds follows a prior investment of $250 million, earmarked for upgrading technology, implementing a modern image, and acquiring new kitchen equipment under the “Royal Reset” initiative in September 2022. Moreover, there was a subsequent injection of $500 million aimed at expediting the renovation of over 600 Burger King restaurants owned by the Carrols Restaurant Group, pending their acquisition.

The initial Reclaim the Flame plan, launched in September 2022, not only focused on physical upgrades but also included a $150 million allocation for digital enhancements and media investments until 2024, known as “Fuel the Flame.” Additionally, Burger King entered into an agreement with franchisees to boost their advertising investments from 2025 to 2028, contingent upon meeting certain profitability metrics.

The investments made under the Reclaim the Flame initiative have yielded promising results, including record-breaking average profitability among U.S. franchisees in 2023. These investments are aligned with Burger King’s objective of achieving an average EBITDA of $300,000 in its U.S. restaurants. Furthermore, the refurbishment of 100 Burger King outlets under the Royal Reset initiative has led to notable increases in sales since reopening.

In January, Burger King unveiled plans to acquire Carrols, its largest U.S. franchisee, for approximately $1 billion. This acquisition is poised to accelerate the brand’s revitalization efforts, with plans to remodel about 600 acquired Burger King outlets using Carrols’ operational cash flows. The goal is to achieve a fully modernized image across the Carrols portfolio by 2028, after which the majority of these outlets are expected to be refranchised to local operators within 3 to 7 years.

The additional $300 million investment will kickstart an enhanced co-investment initiative termed “Royal Reset 2.0,” building upon the achievements of the original Royal Reset program. This program will offer financial incentives to top-performing franchisees, facilitating quality remodels and rebuilds. It is anticipated that around 1,100 additional remodels will be completed by 2028 through this initiative.

With the implementation of the Royal Reset programs and the planned Carrols remodels, Burger King aims to achieve an 85%-90% modernized image across its outlets by 2028. Following the completion of these programs, no further capital is expected to be allocated towards co-investment remodel initiatives.

Tom Curtis, President of Burger King North America, emphasized the brand’s commitment to providing guests with exceptional experiences across all its outlets. He highlighted the collaborative efforts with franchisees to revamp Burger King’s restaurant footprint nationwide and reaffirmed the brand’s aspiration to reclaim its position as a leader in the Quick Service Restaurant (QSR) industry.

As part of its commitment to modernization, Burger King introduced its next-generation restaurant design, “Sizzle,” seven months ago. This innovative design aims to enhance both the guest and team member experiences, with a focus on digital integration and optimizing service modes such as pick-up and drive-thru. Remodel projects under the Royal Reset 2.0 initiative will incorporate the new Sizzle design.

Franchisees are given until October 31, 2024, to opt-in to the Royal Reset 2.0 program, aligning with the collective goal of elevating the guest experience and modernizing Burger King restaurants across the United States.

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