Burger King will invest $400 million in advertising, restaurant renovations and app enhancements over 2 years

02 August 2022, Hamburg: The logo and Schirifzug ‘Burger King’, taken at the restaurant of Mundsburger Damm during a press event of the fast food chain of the same name. Photo: Georg Wendt/dpa (Photo by Georg Wendt/picture alliance via Getty Images)

Burger King is planning to invest more than $400 million over two years in restaurant advertising, improvements and renovations and to support technological and digital improvements.

In a press release Friday, the chain’s owner, Restaurant Brands International, shared details of a plan it calls “Reclaim the Flame” aimed at accelerating sales growth and increasing franchisee profitability.

It was built in collaboration with leaders across the country and trusted by over 93% of restaurants in the United States.

The investment is intended for modernize the Burger King restaurant portfolio and improve the customer experience, driving more traffic to the brand.

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Burger King said it would invest in premium branding to “reaffirm the lofty position of its flame-grilled Whopper”, in addition to building a portfolio of chicken sandwiches with the launch of the Royal Crispy Chicken sandwich.

He noted that as the cost of food at home continues to face inflationary pressures, he will continue to provide “a strong daily value offering on his menu.”

To “fuel the flame”, 150 million dollars will be move towards advertising and digital investments and $250 million is allocated for a “royal reset” involving restaurant technology, kitchen equipment, building upgrades, and high-quality renovations and moves.

Through 2024, Burger King will invest $30 million in addition to digital fees collected from franchisees to support the Burger King app.

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For the “Royal Reset,” $50 million plus a comparable co-investment from franchisees will go toward a restaurant refresh program for approximately 3,000 locations.

In addition, $200 million will go towards renovating approximately 800 restaurants.

It is designed to improve return on capital and change the incentive structure of the business, by providing more substantial base incentives and access to additional contributions, as well as upfront cash funding at the time of start-up. completion of the renovation.

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Contributions from the renovation program will be accounted for as royalty credits and recognized in its income statement over the term of the new franchise agreements, or up to 20 years.

Burger King said it does not expect any material negative impact on the program’s income statement and said that – if successful in generating sales increases consistent with historical experience or better — the program is expected to generate a positive return on capital and be accretive over time.

“We believe this new approach over the next two years will generate the momentum needed to transition to a sustainable reimaging program that returns to more normalized Burger King capital contributions in 2025 and beyond,” the company said. .

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Tom Curtis, President of Burger King North Americasaid the initiatives are aimed at providing a “superior experience” for customers.

“I am very proud and grateful that our franchisees have once again come together to invest in our performance together, reflecting the true partnership and mutual respect we have built between franchisor and franchisees,” Curtis said in a statement.

“Ultimately, the success of this ‘Reclaim the Flame’ plan comes down to execution at the restaurant level, and we are so fortunate to have franchisees who love this brand and work closely with us to focus on the right priorities. I believe in this team, this plan, and a bright future as we evolve and improve our customer experience and drive profitable growth for the business.”

Read the rest of this story on FOX Business.

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