Burger King's Sweeping Changes and $400 Million Investment Appear to Be Paying Off
In the fast-food world, Burger King has long been the bridesmaid, and never the bride. The hamburger chain seems to be perpetually stuck in the shadow of McDonald's, its larger and more profitable competitor. And as of 2021, the home of the Whopper lost its spot as the second-largest burger chain in America to Wendy's.
But things may now be looking up for Burger King after it announced a whopping $400 million investment last year aimed at enhancing its brand and restaurants. In the fourth quarter of 2022, the first full quarter for Burger King under its "Reclaim the Flame" investment campaign, the chain saw an 8.4% increase in same-store sales overall and a 5% increase in the United States alone, CNBC reported. The U.S. same-store sales numbers were up from the 4% increase Burger King saw in the previous quarter.
Additionally, the chain has seen guest satisfaction increase by more than 40%, as well as six consecutive quarters of growth in that area, QSR Magazine reported. And the chain's franchisee profitability increased 40% during the final quarter of 2022, though it is still down from 2019.
Though Burger King may still have room for improvement in terms of domestic sales, 2022's fourth quarter indicates that "Reclaim the Flame" investment is starting to pay off.
"I feel really good about where we're going," Josh Kobza, the incoming CEO of Burger King's parent company Restaurant Brands International, said during the latest earnings call.
Kobza added that there's "definitely a lot of work left to do," but commended the "tremendous leadership team" under Burger King U.S. and Canada President Tom Curtis.
The $400 million campaign, announced in September 2022, includes a $150 million investment in advertising and digital components and a $250 million investment in restaurant technology, kitchen equipment, building enhancements and high-quality remodels and relocations over the course of two years.
In its fourth quarter and full year earnings report, Burger King said that it had already funneled $13 million toward the advertising and digital prong of the investment, as well as $17 million toward the restaurant prong.