Radio Connects’ Post

Big news in the fast-food world! Restaurant Brands International, the parent company of Burger King, just acquired its largest U.S. franchisee, Carrols Restaurant Group, for a cool $1.1 billion. What does this mean? More renovations for Burger King locations: Restaurant Brands plans to invest $500 million to remodel about 600 of the acquired Carrols restaurants. This could mean a fresher look and feel for your favorite Whopper joint! Shifting ownership: Carrols operated over 1,000 Burger King restaurants across 23 states, representing 15% of all U.S. locations. These will now be directly owned by Restaurant Brands, giving them more control over the brand's image and operations. Potential shakeup in the franchise system: Some experts believe this move could lead to Restaurant Brands buying up more franchisees in the future, creating a more streamlined and consistent Burger King experience nationwide. Overall, this acquisition is a major shakeup for the Burger King brand and could have significant implications for the future of fast food in the U.S. https://lnkd.in/dcKug3JU

Burger King Acquires Carrols Franchisee for Rapid Restaurant Remodeling Whopper of a Deal Burger King, owned by Restaurant Brands International Inc., revealed a strategic move on Tuesday with the acquisition of its largest U.S. franchisee, Carrols Restaurant Group Inc., in a noteworthy deal valued at $1 billion. Accelerating the 'Reclaim the Flame' Plan Tom Curtis, President of Burger King U.S. and Canada, expressed enthusiasm about the acquisition, stating, "This move is a pivotal accelerator to our 'Reclaim the Flame' plan, dedicated to relentlessly enhancing the guest experience. Over the next five years, we will swiftly remodel these restaurants, placing them in the hands of motivated local franchisees to create exceptional experiences for our guests." Financial Impact and Stock Movements In premarket trading, Carrols' stock surged by 12.7%, poised to open at its highest level since August 1, 2019. In contrast, Restaurant Brands shares experienced a 1.1% dip, following a close just shy of its January 10 record. Under the terms of the agreement, Carrols shareholders will receive $9.55 in cash for each share, reflecting a 13.4% premium over Friday's closing price of $8.42. Scope of Operations Carrols currently operates 1,022 Burger ... https://lnkd.in/e5cD6-sT

Just an FYI...Bill Ackman's Pershing Square Capital Management, L.P. owns just under 15% of Restaurant Brands International's stock. Act accordingly. If you hold this stock, sell it. If you don't, boycott the restaurants in the group: Burger King, Tim Hortons, Popeyes Louisiana Kitchen & Firehouse Subs. As consumers and investors, we have power. Use it. #franchise #boycott #investing

Fresh. Krispy Kreme. Doughnuts. ...at McDonald's? The two chains announced yesterday that the two iconic brands would be expanding their partnership, with Krispy Kreme doughnuts available in participating McDonald’s restaurants nationwide by 2026. Both McDonald’s and Krispy Kreme used the same press release to make their announcement, leading with this first line: Krispy Kreme to provide fresh doughnuts daily at McDonald’s restaurants nationwide. Let's focus on just three words: Fresh doughnuts daily. The reason why these words are remarkable has to do with Krispy Kreme’s history. In 2006, Krispy Kreme was dying. The company was cash flow negative, while facing billions of dollars in lawsuits with hundreds of millions of dollars in debt. Employee turnover was over 20 percent. It was under investigation by the Department of Justice due to shady accounting practices, and worst of all, same-store sales were declining dramatically. During this time you might have noticed that Krispy Kreme doughnuts were ubiquitous: You could find them in several different types of grocery stores, even in gas stations. But these doughnuts were sold wholesale. In terms of quality, freshness, and taste, those packaged products were much different from the doughnuts you'd get when buying directly at a Krispy Kreme store. Over the next years, though, the company would embark on a major turnaround, starting with its distribution model. Let's see what you can learn from the change, along with the company's new partnership. #krispykreme #mcdonald's #sales #distribution #howtosell

Burger King Invests Another $300 Million To Remodel Restaurants •Restaurant Brands International is committing another $300 million to remodeling Burger King’s U.S. restaurants. •Altogether, the restaurant company is planning to spend $2.2 billion to revive the fast-food chain’s U.S. business. •Burger King expects that 85% to 90% of its roughly 7,000 U.S. restaurants will have the same modern design by 2028. Burger King will invest another $300 million to remodel about 1,100 of its U.S. restaurants as part of a broader turnaround effort, the chain’s parent company said last Tuesday. Owner Restaurant Brands International kicked off Burger King’s comeback strategy a year and half ago with $250 million to renovate restaurants and upgrade its technology and equipment, plus an additional $150 million to invest in its mobile app and advertising. In January, the parent company bought Burger King’s largest U.S. franchisee, Carrols Restaurant Group, for $1 billion to speed up the remodeling process. The company estimates it will spend an additional $500 million updating 600 Carrols’ locations. Including the investment announced last Tuesday, Restaurant Brands is planning to spend around $2.2 billion to revitalize the chain’s U.S. business. The company expects 85% to 90% of its roughly 7,000 U.S. restaurants will have the same modern design by 2028. “It was the first time in a long time that RBI had invested a significant amount of capital back into the business to co-invest with franchisees,” Burger King U.S. President Tom Curtis told CNBC. “I think the process was, ‘Let’s see how this works’... and we’re seeing early results on remodels.” About 100 Burger King locations have been remodeled and #updated so far. Those locations have seen sales climb following their facelifts, according to Curtis. The latest round of remodels will follow Burger King’s new “Sizzle” design, which includes drive-thru pickup for mobile orders and self-order #kiosks. Those new features are expected to encourage customers to order even more Whoppers and fries. Still, Burger King has had to chip in its own money to incentivize franchisees to remodel. Renovations can be costly — especially with high interest rates — and often require the locations to temporarily shutter. As with the initial round of investment from Restaurant Brands, Burger King franchisees who opt in to remodel their locations will receive cash once construction is completed. Burger King will let operators choose how much of a discount they get on the royalties they pay to the company. Burger King’s same-store sales grew 3.8% in the the first quarter, falling shy of StreetAccount estimates of 4.1%. What do YOU think? Is this enough to keep Burger King a major player in the #QSR space?

McDONALDS: PRICE PUSH As Kate Rogers and CNBC have reported, McDonald's reported todays Q2 's double revenue and earnings miss, worldwide. Many factors were at play: price, affordability, lack of low income guets, and global political backlash according to the transcript. And of course strong prior year comps, which makes the reporting optics worse. There is a world wide traffic pull back, and any management team would of course rush to fix it. As reported, the US MCD President Joe Erlanger already has a warning note out to franchisees that important decisions are coming in McDonald's "value" quest. Discussion around redoing the $1/2/3 'dollar menu was noted. Franchisees are always concerned about margins. MCD reported negative SSS in July (with the effects of the US discount deal included) driven by negative guest menu mix, but with positive traffic (values not mentioned). The CFO noted his expectation that MCD company operated unit margins will be down. This signals the discount heavy approach needs rework. From my 40 some years in #restaurant analysis, it seems to me MCD has a myopic view of price versus value. Industry experts and academics have noted price is but one aspect of value. See Restaurant Finance Monitor's 2022 presentations. My experience is that price or average check reductions tend to be the corporate steamroller solution. The problem is, with a store system that is heavily franchised, franchisees bear the CAPEX responsibilities for renewal, remodeling, and maintenance CAPEX. At this time, due to industry shifts, MCD is trying to improve and increase "low" income guests however possible. Most restaurants want higher income guests. That is why the Chipotles, CAVA's, Shake Shacks and Dutch Bros (CAVA, CMG, SHAK and BROS) are doing better. All are almost totally company operated brands. Chipotle Mexican Grill has said in the past they have minimal low income guests, for example. MCD is heavily franchised by choice. It has to work within that context. MCD has the capability to drive profitable sales. It needs to employ the advantages it has--the marketing power to communicate more than one message at a time; star power sponsoring product campaigns; precise promotional execution--no guests getting a double discount; and store level fianncial truth. MCD cloaks franchisee profitability in many ways and calls it "cash flow:. No it isnt--it is a EBITDA number with all the limitations that EBITDA as a metric has. Taken together, the McDonald's operation is a capital heavy business whatwith the buildings maintenance CAPEX and IT CAPEX. Reforming this metric is an easy first step. https://lnkd.in/g5t6wFFS

At the Restaurant Franchising & Innovation Summit in Kansas City last month, Bikky CEO Abhinav Kapur asked a panel of diverse, best-in-class operators: what does data as a superpower mean to you? Jill Marchick of Applebee's Neighborhood Grill + Bar: ➡️ using guest, check, and feedback data to prove the success of the Dollarita ➡️ telling a compelling story around the business case to align franchisees ➡️ highlighting the impact of the promotion to front-line teams so they're ready to execute in the restaurant Doug Willmarth of MOOYAH Burgers Fries and Shakes ➡️ using the loyalty program to power their digital marketing efforts ➡️ incentivizing guests with attractive offers to get them into the digital ecosystem ➡️ leveraging segmentation and effective communication to drive higher frequency Yaron Goldman of Rib & Chop House ➡️ it's all about driving sales - if the data doesn't help you do that, it doesn't matter ➡️ honing in on the 1-2 key metrics your team in-restaurant needs to know to best serve the guest Robert Andersen of The Great Greek Mediterranean Grill ➡️ using data to pivot your real estate strategy and meet guests where they are ➡️ creating a centralized dashboard of the most important KPIs to align franchisees and corporate ➡️ religiously following guest feedback data to make sure you deliver a best in class experience as you rapidly scale Get the full video to the panel, plus more takeaways, at the link below: https://lnkd.in/eSnmuXmH

Jonathan Maze Restaurant Business Online tells what's coming at McDonald's with "the fast-food giant, which has shifted its focus to value, is working to convince franchisees to go along with a bundled meal featuring a McChicken or a McDouble. The plan is expected to pass." McDonald’s is considering a $5 value bundle in a bid to bring inflation-weary consumers back into its restaurants. The fast-food burger chain is working to convince franchisees to OK a $5 meal deal that would last for a limited time. Customers would get their choice of a McChicken or a McDouble, along with a four-piece Chicken McNuggets, fries and a drink. Bloomberg first reported the offer and several sources confirmed it to Restaurant Business. Operators two weeks ago turned down a $5 offer through OPNAD, or the Operators National Advertising Fund. McDonald’s returned with an offer sweetened with the help of The Coca-Cola Company. Franchisees we spoke with expect the deal will ultimately get approval in a field vote set for this week. The National Owners Association (NOA), an independent group of 1,000 McDonald’s owners, praised Coca-Cola for stepping in, though it did not explicitly endorse the offer. “NOA believes the current strategy demonstrates an unwavering commitment by McDonald’s franchisees and our incredible supplier Coca-Cola to address the immediate financial challenges our consumers are facing by offering this phenomenal value to our guests,” the association said in a statement to Restaurant Business. “There are additional value tests being conducted across the country as we seek even more value options to help our customers during these challenging times,” NOA added. “The franchisees are committed to our guests and are making significant investments to bring these values to them.” The inclusion of Coca-Cola into the value process is notable. It’s not uncommon for major franchises to seek financial assistance from major suppliers, in the form of rebates or other incentives, to convince franchisees to go along with major ideas. McDonald’s and its beverage supplier have long been close partners. NOA, however, argues that the third leg of McDonald’s famous “three-legged stool” featuring the franchisor, franchisee and suppliers, should step up financially, too. Historically, the group said, the company helped with such strategies. “The only disappointment is the lack of any financial contribution by McDonald’s to assist with bringing these incredible value offerings to our customers,” the statement said...Clickthru to read more." https://lnkd.in/eqtNHs4d #QSR #Entrepreneur #Restaurants #Franchise #Franchising #FranchiseChat Chainformation Altir Industries, Inc. Franchise Pipeline Franchise Development Outsource Ned Lyerly Joe Caruso Michael (Mike) Webster PhD Anders Hall Jonathan Martin Michael Scherr Chris Kempczinski Ian Borden Taco Bell, The Wendy's Company Burger King

Will Burger King’s additional $300 million investment get guests back in restaurants? Burger King is ramping up its modernization efforts with a $300 million investment to update 85–90 percent of its U.S. restaurants by 2028. This follows better-than-expected sales in Q1, with comps rising 3.8 percent, driven by initiatives like the "Reclaim the Flame" plan launched in 2022. The investment will accelerate the brand's "Long-Term Royal Reset Program," building on previous commitments totaling $250 million. Burger King aims to redesign over 6,000 stores, enhance digital capabilities, and increase advertising investments based on profitability metrics. Burger King's modernization, centered on its "Sizzle" design, emphasizes digital, pickup, and drive-thru experiences. Franchise profitability at Burger King U.S. increased nearly 50% to $205,000 in 2023, surpassing the company's initial projections under its 'Reclaim the Flame' initiative. Executive Chairman Patrick Doyle revealed that the initiative aimed for franchisee profits of $175,000 by 2024. Understanding market trends and changing consumer preferences is crucial for the success of a rebranding effort. This initiative will impact Burger King's market position and provide insights into large-scale rebranding effectiveness in this fast-moving industry. Contact us for more restaurant news. Andy Cepeda 📞 (972) 755-5138 ✉️Andy.Cepeda@marcusmillichap.com Vincent Knipp 📞 (972) 755-5205 ✉️ Vincent.Knipp@marcusmillichap.com 👉 Click link for details: https://lnkd.in/gUh9_YEj #NNN #retail #realestate #investment #investing #commercialrealestate #property #passiveincome #cre #investor #realestateinvesting #commercialproperty #netlease #retailrealestate #burgerking