Burger King Will Close Hundreds More Restaurants This Year

If there was one word to describe the current state of Burger King's business, it would be complicated. The fast-food giant beat analyst estimates in the first quarter of 2023 with a 12.3% increase in global same-store sales and an 8.7% increase in same-store sales in the United States. But as the company reported these promising results, it also revealed that it expects to close hundreds of stores in the United States throughout the year in an effort to "improve the overall health of the system."

After struggling with lagging sales in recent years, Burger King announced a massive $400 million "Reclaim the Flame" investment campaign in September 2022 aimed at improving its brand and restaurants. Though positive gains in same-store sales and customer satisfaction in the final quarter of 2022 indicated that the investment was starting to pay off, Burger King has still faced several hiccups on the road to recovery in 2023, especially with its franchisees.

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Two major operators—TOMS King Holdings and Meridian Restaurants Unlimited—filed for bankruptcy in the first quarter of the year due to declines in foot traffic and revenue. The chain has also closed dozens of restaurants in recent months, including 27 of Meridian's locations and 26 restaurants from another operator that was embroiled in a lawsuit with Burger King.

Josh Kobza, CEO of Burger King's parent company Restaurant Brands International (RBI), said in an earnings call this week that the burger chain has historically shuttered a couple hundred locations in the United States every year. This year, they expect closures to fall somewhere in the 300 to 400 range, though Kobza noted that the exact number remains unclear at this time.

Most of the closing restaurants will be "low volume" units, Kobza said, so RBI believes that any decreases in Burger King's American sales won't match the decreases in the chain's restaurant count. Moving forward, franchisees will play a major role in efforts to improve Burger King's American restaurant system, since they'll have to be willing to work with the company to implement any necessary changes, Kobza said.

"If they can't, we have operators ready to step in and do what's required," he added.

Despite the looming closures, Kobza expressed confidence in Burger King's performance in the first quarter of 2023 and outlook for the rest of the year.

"We're feeling increasingly positive about the case path forward this year and into the future," he said.

As Burger King customers wait to see which markets will face these potential closures, they can enjoy several recently-launched menu items at their local restaurants. The chain introduced a spicy spin on its classic Chicken Fries in March and brought back three versions of its popular Melts sandwiches with gourmet touches. Burger King also started testing a brand-new Bacon Jam Brisket Whopper last month, but only in Las Vegas and Minneapolis.